The head of PSA Peugeot Citroen denied on Thursday that the company had changed a key 2003 profit target, but failed to halt a slide in its shares amid worries the firm would fall short, Reuters reported.

According to the news agency, Jean-Martin Folz said PSA had not changed its goal for an operating margin in its car division of at least 3.7% this year, but stressed this was “a target, not a forecast”.

Reuters noted that his comments followed market rumours that PSA’s chief financial officer had told analysts the firm could have trouble meeting the target due to a worse than expected French car market.

“With the overall western European car market showing little signs of improvement, we believe that Peugeot will not be able to achieve its 3.7% operating margin in the second half,” a Paris-based autos analyst told Reuters.

Traders and other analysts told the news agency CFO Yann Delabriere had told analysts at car launches in Paris on Wednesday the firm would have difficulty meeting the target.

“Peugeot presented the [Citroen] C2 yesterday and hinted that the full-year targets would be difficult to meet given a worse-than-expected French market,” a Paris-based broker, told Reuters.

A PSA spokesman told Reuters that Delabriere was among executives meeting analysts on Wednesday at car launches outside Paris, but could not confirm the comments cited by traders and analysts.

“We endeavour to meet (our targets) and we have not changed them,” Folz reportedly said, when asked about a full-year target to match or better the firm’s first-half operating margin of 3.7% in its autos division.

Reuters said he spoke to reporters during a visit to open a new paint shop at the firm’s Mulhouse plant in eastern France.

One analyst, who was not present at the meeting, told Reuters he doubted PSA would have issued a full blown profit warning but that the company might have been less confident on its likely financial performance this year.

Reuters noted that PSA was forced to cut its full-year profit targets in July for the first time since Folz took the helm in 1998 as it fights a strong euro and a weak domestic market.

According to the news agency, Folz told newspaper Les Echos last week new car sales in France, one of Europe’s hardest hit car markets, were unlikely to recover quickly and told reporters at the Frankfurt motor show earlier this month that he expected demand in France to fall some 8% this year.

Reuters noted that, though PSA had carved out a reputation as Europe’s most reliable mass car maker and has kept market share rising with a string of hit models, the company has, however, seen its stock slide in recent months as rivals churn out smart new offerings and investors realise the firm’s tough cost-cutting regime cannot shield it from wider sector blues.