French carmaker PSA Peugeot Citroen today swung to a first half loss with sales down over a fifth, and said it saw a recovery in the European automobile market starting towards the end of 2010.
PSA reiterated that it expected a recurring operating loss of between €1 and €2 billion for the full year in an environment that would remain "difficult". It said it saw the European market declining 12 percent in the year as a whole, with a 7 per cent drop in the second half.
The group recorded a net loss of €962 million, compared with a net profit of 733 million euros in the same period last year before the industry was engulfed in a sales crisis.
Operating loss for the first half was €1.332 billion, compared with an operating profit of €1.029 billion in the first half of 2008. The group had a recurring operating loss of 826 million "due to adverse market and industry conditions" it said in a statement.
Earlier this month PSA Peugeot Citroen posted a 17.5 per cent drop in sales of assembled vehicles. Including sales of completely knocked-down (CKD) kits, which are shipped for assembly in markets such as Iran, sales fell 14 per cent.
PSA said today it expected to increase market share in Europe above 14 per cent in the second half, thanks to new model launches.
The car industry has been hit by an unprecedented sales crisis and many governments have stepped in to help beleaguered carmakers by launching scrapping incentive schemes,.
Makers of small cars, including PSA Peugeot Citroen, and fellow French manufacturer Renault, which reports its own first half results tomorrow, have benefitted.
Reuters