PSA Peugeot-Citroen is refuting reports it is mulling further capacity cuts as the automaker continues its series of negotiations with unions.

Reports in Germany last week appeared to indicate PSA chairman, Philippe Varin, was evaluating further cuts, a suggestion hotly refuted by the manufacturer, which is to have more discussions with its labour bodies this week.

"He [Varin] never spoke about new cuts - he never said that," a PSA spokeswoman told just-auto from Paris. "What is clear [is] we are currently negotiating an agreement in France about competitiveness - this is true.

"He spoke about what we have said for a few weeks now - we want to increase the utilisation rate in our plants in France in order to meet 100% utilisation by 2015."

PSA is due to meet its unions in the French capital this Wednesday (18 September), in the latest round of talks designed to address the social implications of its restructuring programme.

That reorganisation has already seen PSA announce the closure of its Aulnay plant near Paris next year - with part of the site due to shut next month.

The manufacturer is closing the C3-producing Aulnay plant as part of restructuring plans designed to stem difficulties associated with declining European demand, with the move forming part of a total 8,000 job losses.

"At the moment there have been no discussions on this subject," [further cuts] CFTC (Confederation Francaise des Travailleurs Chretiens) union leader, Franck Don, told just-auto from France.

"There are things in the next week on the social contract to be discussed - the utilisation of the factories in the next years and the spread of volume between French territories and other countries. We are going to meet this week in Paris."

PSA recently said half the 2,800 staff at Aulnay had found "another solution, either internally or externally," for employment.

A further 800 are engaged in a redundancy phase, while another 550 are "still not decided."