Peugeot looks to short-term after worst loss in 20 years

FRENCH carmaker PSA Peugeot Citroën yesterday refused to give a 2010 forecast beyond mid-year and warned conditions would remain tough, after it posted its biggest net loss in 20 years.

The group said it expected the European market to decline 9 per cent this year, but that efforts to drive sales, cut costs and improve capacity utilisation as well as new model launches would benefit PSA and it would post a positive recurring operating income in the first half.

Chief executive Philippe Varin said: "Given that the end of 2010 will represent the start of economic recovery as well as the end of scrapping schemes – with some uncertainties over the timing of the end of the different schemes – we preferred to limit our commitment to the first half."

The European car industry faces the prospect of falling sales as many of the scrappage schemes brought in early last year to prop up plummeting markets are gradually phased out.

PSA's full-year net loss widened to 1.16 billion (1.02bn), its biggest loss in two decades and compared with an average estimate of just over 1.1bn.

Societe Generale analyst Eric-Alain Michelis said: "By giving a forecast only for the first half of 2010, the group is doing the bare minimum, playing it safe."

• Honda has added almost 440,000 cars, mainly in North America, to its global safety recall over airbag inflation problems. The latest announcement also covers Japan, Australia and elsewhere in Asia.