First-quarter production at French car maker PSA Peugeot-Citroen was running 20%-25% below year-ago levels, but suppliers are suffering much more from the severe industry downturn, a senior company official said recently.
Roland Vardanega, acting chief executive since the firing of Christian Streiff at the end of last month, told a small group of journalists that suppliers are facing production cuts of 25%-40% as they struggle to reduce inventories.
Sales in March - especially those of small cars - were propped up by government scrapping incentives, notably in France, Germany and Italy, Vardanega said.
He said Peugeot-Citroen hasn't been talking to the French government about preparing for an eventual end to the incentives. "Until there's a sign of a solid recovery, it's difficult to end this type of measure," he said.
Commenting on the "enormous" effort being made by Germany, which has just decided to devote between EUR4 billion and EUR5 billion to extend its scrapping scheme through year-end, Vardanega said such measures "are necessary if the automobile industry is to survive."
Vardanega was speaking on the sidelines of a signing ceremony for an accord with French Labor Minister Laurent Wauquiez under which the state will subsidize the cost of keeping on and training workers who would otherwise be laid off.
