Europe's second-largest carmaker, PSA Peugeot-Citroen, yesterday beat market forecasts with its first-half results and nudged up this year's margin target for its auto division.
The company, one of the few bright spots in the European auto sector this year, said its first-half net profit slipped 4.1 per cent to pounds 627 million.
But operating profit rose 8.7 per cent to pounds 970 million on sales of pounds 1.7 billion.
PSA, which until now has been calling for an operating margin in its key autos division of 4.8 to 5.0 per cent in 2002, also said it was now officially targeting the top end of that range. 'Taking into consideration the results of the first half, we are now targeting an operating margin in the auto division of five per cent and overall operating profit of 2.9 billion euros (pounds 1.8 billion),' the company said in a statement.
It also reiterated its objective of selling 3.25 million vehicles this year.
Under its chairman Jean-Martin Folz, the French automaker, which has its UK manufacturing operation at Ryton, Coventry, has discovered an unexpected flair for design which has drivers paying premium prices for flashy new models like the sleek Peugeot 307 and bubble-shaped Citroen C3. 'These results are very encouraging,' said Adam Collins, autos analyst at Schroder Salomon Smith Barney.
'We are encouraged by cash flow developments, and they are saying they can achieve the higher end of their previous guidance, despite market conditions that are worse than previously expected.'
Sales of new cars in western Europe, PSA's most important market, have declined 4.5 per cent so far this year amid weak economic conditions, a trend most experts expect to continue. …