PSA Peugeot Citroen, the region’s second-biggest carmaker, forecast a moderate recovery of the European auto market next year as the company works to shore up its finances and maintain market share.
“The worst is behind us,” Chief Executive Officer Philippe Varin said at a press conference today at the International Motor Show in Frankfurt. “We’re expecting a slightly positive growth in Europe” in 2014. The shares climbed to the highest in more than 17 months.
Varin, who reiterated the Paris-based company’s forecast for a 5 percent decline in Europe this year, said Peugeot’s market share in the region should improve in the last quarter from a year earlier.
Peugeot brand chief Maxime Picat said in an interview today that sales of the new 308 compact and 2008 crossover may help the company beat a target of reducing its cash consumption by 50 percent in 2013. Peugeot, which reported a 510 million-euro ($672 million) first-half operating loss at its automotive division, plans to eliminate 11,200 jobs in France by 2015 and close a car plant in Aulnay, on the outskirts of Paris.
The French manufacturer’s shares rose as much 98 cents, or 8.1 percent, to 13.08 euros, the highest price since March 27, 2012, and were up 5 percent as of 12:47 p.m. in Paris. Peugeot stock has more than doubled this year, giving the carmaker a market value of 4.5 billion euros.
Peugeot is curbing costs as the European market is set to decline for a sixth consecutive year. The slump hurt the automaker in particular because of the company’s focus on small and mid-range cars that have been the dominant models in debt-strapped southern Europe.
The Peugeot and Citroen brands had a combined European market share of 11.1 percent in the first half, a decline from 12 percent a year earlier, according to figures from the ACEA carmakers’ lobby. That compares with 12.5 percent in the first half for Volkswagen AG’s namesake brand. VW is Europe’s largest automaker.
As part of a plan to reduce fixed costs in its home country and Europe, Peugeot has started talks with French unions. Concessions the manufacturer is seeking include scaling back extra pay for overtime or night shifts and more flexibility on assigning work days, Peugeot said on Sept. 5.