PARIS: French auto group PSA Peugeot Citroen, struggling with deep restructuring and just supported with state guarantees, said last week that sales had fallen by 3.9 percent in the third quarter and that it was waiving dividends.

The group, which had announced 8,000 job cuts and a plant closure earlier this year, said that sales fell to $16.7 billion in the quarter amid increasing competition and a weakening of the European market.

It warned that it now expected sales in Europe, its main market, to fall by 9 percent instead of the 8 percent previously forecasted. The carmaker added it expected its net debt to rise to $3.9 billion at the end of the year instead of $3.1 billion. The group’s financial arm, BPF, announced that it would receive state guarantees totaling $9 billion over three years.

The second biggest carmaker in Europe said that in return it would not pay a dividend or issue stock options during this period.

The French government said in a separate statement that another condition attached to the state guarantee was the creation of a monitoring committee on which the state, PSA and an independent administrator would sit.

An independent expert brought in to examine the planned job cuts found that restructuring was needed because of strategic mistakes going back 20 years and as the company had failed to keep up with globalization.

PH development
In the Philippines, Eurobrands Distributor, the newly appointed distributor of the brand, announced in a recent news conference that it is targeting a 5-percent share of the domestic market in five years and that it plans to open six dealerships by year’s end, with another six scheduled in 2013. To date, Eurobrands has yet to open its first dealership.

In a report published in the online edition of Top Gear Philippines, Eurobrands President Felix Mabilog Jr. in the same news conference was quoted as saying that the Philippines’ car industry should be posting higher sales results if not for illegally imported vehicles flooding the market, and had pointed to a “Mr. Enrile” as the one responsible for the anomaly.

WITH A REPORT FROM FAST TIMES