PSA Peugeot Citroen has issued its second profit warning in just three months.
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A BBC report said the firm now expected to report operating profits of EUR1.9bn (GBP1.3bn) for 2005, or 3.4% of sales, as trading deteriorated further.
Last October, it warned that profits would be less than 4% of sales.
The report said Peugeot Citroen sold 3.39m vehicles in 2005, up 0.4%, at a time when most of Europe’s carmaker are struggling against weak sales.
Despite low interest rates across Europe, unconfident consumers appear to be delaying large purchases, the BBC noted. Peugeot Citroen’s overall sales in 2005 were up just 0.4% to 3.39 million units, while sales in its key European market were down 2.7%.
The automaker added that in the last quarter of 2005, European sales had declined more than expected, and that the market had become even more competitive.
“Because of that, the production reduction announced in the autumn has been stepped up but nevertheless without allowing us to bring down the stock of vehicles to target levels,” it said, according to the BBC, which noted that the world’s sixth-largest carmaker is banking on several new model launches to put 2006 sales back on track.
