Peugeot-Citroen announces 'massive' cuts

PSA Peugeot-Citroen today slashed its full-year targets and announced "massive" production cuts after third-quarter revenue shrank by 5.2 per cent.

The French car maker said that sales in the previous three months fell to €13.3bn (£10.6bn) from €14.02bn (£11.35bn) as the financial crisis hit auto sales in Europe and slowed growth elsewhere.

Anticipating a 17 per cent drop in the European market in the fourth quarter, Peugeot-Citroen said it now expects its global sales volumes to fall 3.5 per cent from 2007.

Previously it had been expecting volumes to grow 5 per cent this year.

Europe's second-largest car manufacturer by sales has reduced its target for operating margin - a measure of earnings from ongoing operations - to 1.3 per cent for 2008 from 3.5 per cent.