PSA Peugeot Citroen could reach its cashflow target two years early thanks to better than expected growth at its growth at its Faurecia parts unit which contributed to an unexpected increase in third quarter revenue.

Chief financial officer Jean-Baptiste de Chatillon said the company may move to positive operational cash flow this year rather than in 2016 as Q3 sales rose 1.6% to EUR12.3bn (US$15.6bn).

He restated PSA’s target today (22 October) for recurring earnings before interest and taxes to amount to 2% of sales by 2018.

The carmaker posted a first half profit for the first time in three years this year and is working to restore earnings by bolstering sales outside Europe, scaling back its model line-up and expanding its partnership in China with Dongfeng Motor.

Chatillon added PSA is also on track to decrease inventory by EUR700m this year as part of its four-year, EUR1bn, reduction programme up to 2016.

Q3 deliveries increased 5.4% to 643,600 vehicles worldwide, rising 44% in China and south east Asia and 7% in Europe, though there were declines in Latin America and Russia.

Faurecia’s revenue rose 6.5% to EUR4.39bn with sales in China jumping 21% and 9.4% in Europe.

Chatillon noted factory utilisation in Europe rose to 83% by the end of September, up from 72% at the end of last year, while the company has been successful in reducing production costs.

He said he expects the new car market in Latin America to decline 10% this year while Russia could slide 15% although Peugeot raised its forecast for Europe, expecting growth of up to 5% from an earlier forecast of 3%.