PSA Peugeot Citroen SA, Europe's second-largest car maker, plans to cut overhead costs by 30 percent, scale back spending on supplies and release a series of new models in a bid to reverse last year's sales and profit drop, Bloomberg News reported.
Peugeot plans to release 41 new cars and light trucks through 2010 to raise its western European market share to 15.5 percent that year from 13.5 percent currently, Chief Executive Officer Christian Streiff said in Paris. He declined to provide specifics or a 2007 forecast.
"I would have liked more detail on the 30 percent figure, on exactly what it entails and whether all of it is entirely new," said Georges Dieng, an analyst at Ixis Securities who has a "buy" recommendation on the stock and attended the annual shareholders meeting that followed yesterday's briefing. "Some people may have been disappointed by the lack of detail."
Like Renault SA, its main French competitor, Paris-based Peugeot faces shrinking demand at home and fiercer competition from Toyota Motor Corp and other Asian car makers, which have gained European market share.
After taking office on February 6, Streiff, 52, gave himself 100 days to devise a medium-term plan and last month ordered 4,800 job cuts in France. He reiterated that he'll provide detailed earnings goals in September.
Climb the slope
"The announcement lacked precision about the restructuring program," said Frederic Boissel, a trader at Fimat Group in Paris. "Peugeot wasn't clear about job cuts or new models. It's a disappointment."
Streiff said his September presentation will include numerical targets for spending reductions, sales and profit.
"We'll fight so that 2007 is the year we start to climb the slope in terms of results," Streiff said. "Our current goal is to find new sales volumes and find growth. All the cost cuts are just the sine qua non for that."
Sales of Peugeot car and light trucks fell 0.6 percent to 3.37 million units last year from 3.39 million vehicles in 2005. Net income slumped 83 percent to 176 million euros from 1.03 billion euros.