Revenues at PSA Peugeot Citroen dropped 24.9% in the first quarter of this year line with falling sales in global markets and efforts to reduce excess vehicle stocks.

The automaker said it achieved a 21.4% reduction in inventories vs Q1, 2008. Market share in western Europe was 13.8% and it claimed leadership in low emission cars and light commercial vehicles.

"First quarter revenues illustrate, as expected, the full extent of the crisis being experienced by the automotive industry worldwide," PSA said in a statement.

Automobile revenue dipped 23% to EUR8.7bn, parts unit Faurecia was off 38.1% to just over EUR2bn, Gefco was down 28.2% to EUR664m and Banque PSA Finance fell 11.8% to EUR462m.

Total group revenue was down 24.9% to EUR10.97bn.

PSA is maintaining its forecast of a 20% fall in sales across Europe in 2009.

"While the various European incentive programmes have had a beneficial impact on sales, notably in France and in Germany, the overall outlook remains volatile with limited visibility at this stage in the year."

It will need about EUR4bn of new funding in 2009 and in February obtained a EUR3bn loan from the French government plus EUR400m from the European Investment Bank. This, PSA said today, would "satisfy a significant share of this funding requirement".

Also in February, PSA Peugeot Citroën said it expected 2009 to be a loss making year and to incur negative free cash flow.

"This expectation remains unchanged," it said today. "The change in the payment terms to suppliers has had a negative impact on free cash flow, but this has been partially offset by the benefits of the Cash 2009 programme to reduce inventory levels.

"In this context, CAP 2010 and CASH 2009 remain a priority and further inventory reduction will be pursued in the second quarter."

The 23% drop in automotive revenues of 23% to EUR8.68bn in Q1 09 was due mainly to the decline in volumes given the weak markets and inventory reduction in the dealer network.

Q1 09 revenues for new cars declined by 27.4%, negatively impacted by a 24.9% fall in volumes, the change in segment mix to smaller, less expensive vehicles of 2.5% and a negative foreign exchange impact of 2.2% which was partially offset by a positive country mix of 1.1%.

Markets in western Europe dropped 18.5% overall, although government scrappage incentives in several European countries did bring some relief.

The most favourable impact was in Germany where the scrappage incentive led to a sharp increase of 15% in demand, despite the weak underlying macro economic environment.

In France, the incentive scheme limited the market decline to 7.3%. All other European countries recorded significant falls with Italy down 19.9%, Spain collapsing by 44.1% and the UK dropping 31.5%.

PSA said it benefited from its strong line of low consumption, low emission smaller cars.

In Germany, the Group's market share rose from 5.7% to 6% and in France from 32.6% to 33.3%.

But, here in the UK, to reduce the negative currency impact on sales, the group recorded a 35.7% decline in registrations.

Group market share in western Europe overall was maintained at 13.8% in the first quarter compared to all of 2008.

PSA also claimed leadership in light commercial vehicles with a 3 point increase in market share to 22.4%.

Central and Oriental European markets declined 38.5% overall but PSA gained 1.2 points of market share to 8.2% due to an improving presence in Turkey.

Russia, however, "collapsed" 40.3% in the first quarter. Nonetheless, PSA booked a 26.6% increase in registrations, and more than doubled market share to 3.4% due to increased market penetration by the Peugeot brand and the launch of a Citroën subsidiary.

A contrasting first quarter was experienced in Latin America with the market down 11% overall. Sales in Brazil improved by 3.9% but Argentina was down 13% and Mexico by 23%.

China "returned to positive territory in Q1" and PSA recorded growth of 14.5%, noting that the group "continued to struggle in the face of stiff competition with registrations down by 3.5%".

CKD kit sales rose 40% to 93 000 after a strong March versus the same month in 2008.

Parts maker Faurecia's revenues fell 38.1% in Q1 to EUR2.008m due to the extensive production cuts at carmakers.

Gefco revenues fell 28.2% to EUR664m as the economic slowdown reduced the logistics needs across its customer network. Revenues declined in line with its customers' markets, down 25-30% for automotive and 10-15% for other industries. Revenues were also negatively impacted by adverse foreign exchange variations.

Banque PSA Finance revenues declined 11.8% to EUR462m. The bank continued to reinforce its commercial performance and increased its penetration rate 3.6 points to 28.3%.