Peugeot Citroen to introduce massive production cuts
The French car group, Peugeot Citroen, after issuing warning on sharp decline in sales and profits, decided to impose massive cuts in production with immediate effect.
Europe’s second largest auto maker had to cut back its ambitious targets after registering a third quarter drop of 5.2% in sales to €13.3bn (£10.62bn) and 7.1% decline in car turnover to €10bn.
The French group predicted a 17% plunge in Western European car markets in the third quarter since customers were postponing their big spending in the backdrop of the credit freeze and recession.
This is the latest big car-maker after Renault, Daimler and Fiat which underlined severe effects of financial upheaval on the industry’s economy. The Italian group’s sales are likely to drop 20% in 2009.
The Swedish maker of trucks and buses, Volvo, also reported a 37% slump in net earnings and predicted a fall in sales in Japan, US and Europe.
Peugeot was expecting European car sales to drop 8% this year with its own global sales going down 3.5% in 2007, since emerging markets were also impacted by the crisis severely.
The group’s profits initially targeted at 3.5% have been revised to just 1.3%, leading to a repeat of their abject performance few years ago.
Chief executive Christian Streiff stated that group was focussing on cash management and was holding on to its capital reserves. He added that group reacted swiftly to the crisis and took exceptional step of output cut knowing well that it was detrimental to operating margin of 2008.
Other Aspects:| Sales management training |
Discussion Area - Leave a Comment