Expanding cooperation with Mitsubishi into B segment vehicles is on the table at PSA Peugeot-Citroen but not a priority right now, chief executive Phillipe Varin said at the AGM on Tuesday.

PSA already rebadges Mitsubishi's i-MiEV electric vehicle and the pair are working on electric delivery vans.

"We are pursuing our cooperation with Mitsubishi," Chief Executive Philippe Varin told the meeting, according to Dow Jones. Asked if cooperation on a sub-compact vehicle is among the projects being studied, Varin said: "The subject is still on the table, as we will need B-segment vehicles for emerging markets. But we are looking at all our options with Mitsubishi, and for the time being this isn't the option that we are focusing on."

Varin said Peugeot-Citroen wanted EUR3.7bn of cost savings over the 2010-2012 period to improve profits, more than a 2009 target of EUR3.3bn. The company is aiming for another EUR1.1bn of cost reductions in 2012 following a similar reduction in 2011. In 2010 it achieved cost savings of EUR1.5bn, EUR400m more than originally planned.

Peugeot-Citroen still expects operating income from its automobile division in 2011 to be above the level of 2010, according to the report, with a EUR1.1bn contribution from its ongoing plan to enhance profitability more than offsetting the impact from rising raw material and other input costs.

It said its Faurecia parts subsidiary as well as its Gefco logistics unit and Banque PSA Finance will all post higher operating profit this year.

The company expects a flat European car market in 2011 while sales in China, Russia, Latin America and other emerging markets will generally see double-digit percentage growth.