Peugeot raises forecast for industry's European sales

PSA Peugeot Citroen raised its European auto-market forecast for 2009 and said it will update its own full-year profit guidance next month.

"I think Europe will do better than minus-10 percent," Chief Executive Officer Philippe Varin said today in a briefing for reporters.

Paris-based Peugeot, Europe's second-biggest carmaker, has twice raised its industrywide sales forecast for the region this year. Last month, the CEO changed his prediction to a 10 percent decline from 12 percent and said Peugeot's full-year operating loss would be closer to the bottom end of a previously stated range of 1 billion euros ($1.5 billion) to 2 billion euros.

Varin said he will address next month whether his latest industry forecast will affect Peugeot's earnings. The CEO plans on Nov. 12 to give his first long-term strategy presentation since he was appointed in March to replace Christian Streiff, who was ousted from the top job.

Peugeot surged as much as 3.5 percent to 24.39 euros in Paris trading after Varin's announcement and was up 2.8 percent at 2:17 p.m. The stock has almost doubled this year, giving the carmaker a market value of 5.67 billion euros.

Soon after his appointment, Varin pledged to expand overseas and reduce dependence on saturated western European markets. The carmaker has a market share of about 3 percent in China and lost ground in Latin America with a 13 percent drop in third-quarter vehicle sales, outpacing that market's 7.6 percent decline.

China Displeasure

"I'm not very pleased by the level of our market share either in China or Latin America," Varin said in a Bloomberg Television interview.

Peugeot expects a surge in Chinese sales from the introduction of models including the Citroen C5 mid-sized car and C4 compact, Varin said. "We've stopped the decrease of market share and I see a strong improvement of our sales in the next few years."