Most of the improvement came from the automobile division’s 858m€ operating income compared to 267m€ in 2006. This tripling of income was due mainly to the first positive effects of the Cap 2010 competitiveness programme: Quality improvements with a drop in warranty expenses, plus a sharp drop in fixed costs and overheads and higher productivity, PSA said.
Group turnover rose 7% to 60,6b€, 47.5b€ for Automobile division and 12.7b€ for Faurecia of which operating income rose to 1% of turnover, compared to 0.6 %.
PSA said its CAP 2010 programme would have an even greater impact in 2008, especially through the reduction of overheads, warranty expenses, manufacturing and purchasing costs and the launching of a sales and product offensive.
In Western Europe, where the business environment is likely to see a slight decline in the automotive market, the group expects to enjoy continued success with the Peugeot 207and the Citroën C4 Picasso, and see a rising demand for the Peugeot 308 and other models launched in 2007.
New models this year include the Citroën C5, more 308 models (such as a station wagon), and the launch of the Citroën Nemo/Peugeot Bipper and Citroën Berlingo/Peugeot Partner van lines.
In its strategic expansion regions (eastern Europe, Mercosur, China and Russia) the group is forecasting double-digit market growth, slightly lower than 2007.
It is maintaining its sales target at between 3,550,000 and 3,650,000 vehicles and CKD units in 2008, growth of around 5% and stronger in the second half, considering new vehicle launch schedules.
The group hopes to achieve a 3.5% consolidated operational margin in 2008