Peugeot Citroen reported a more than fourfold rise in 2007 net profit today and a better operating margin as its C4 Picasso and other new cars as well as cost cuts kept it on course for a 2010 margin target.
PSA, Europe's second-biggest carmaker after Volkswagen, said its operating margin - a key benchmark in a sector struggling with weak growth in main European markets and high raw materials costs - rose to 2.9 per cent from a record annual low of 2 per cent in 2006.
It set a 2008 target of 3.5 per cent. Italy's Fiat had a 2007 margin of 5.4 per cent and Germany's premium carmaker BMW has a margin of 6 per cent and a 2012 target of 8-10 per cent.
PSA's 2007 recurring operating income was €1.75 billion up from €1.12 billion in 2006 and compared with analysts' average forecast of €1.48 billion. Net income was €885 million, up from €183 million and against a forecast €910 million.
The share price jumped 5.7 per cent to €50.35 euros earlier, while the DJ Stoxx European auto index was up 1.9 per cent. The stock had fallen around 8 per cent so far this year.
PSA, the world's sixth-largest carmaker in terms of vehicle production and eighth in sales, will launch 20 models in 2008, including five for China and five for South America as part of plans for 53 model launches in the 2007-10 period.
But he said the company had taken into account expected weak European markets in its 2008 sales outlook, and he kept profit targets based on new model launches and growth in emerging markets such as China and South America.