(MENAFN - AFP) Struggling French auto maker PSA Peugeot Citroen reported a fall in third-quarter sales and warned that one of its ventures with General Motors was in doubt on Wednesday, but held to its financial targets.
The price of shares in the group, the biggest French car manufacturer and the second-biggest in Europe after the VW group, rose by 4.71 percent to 10.89 euros in initial trading.
The overall French market as measured by the CAC 40 index was down by 0.55 percent.
At brokers Global Equities, Xavier de Villepion commented: "The market is thinking mainly in terms of 2014 and hopes to see an improvement in the performance and financial structure of the group."
He said that the latest data was difficult to interpret and that the share price tended to react to "rumours about capital alliances".
Peugeot said that sales in the quarter fell by 3.7 percent on a 12-month comparison to 12.1 billion euros.
This reflected a fall of sales, notably in Europe, in Russia and Brazil, strong competition in Europe, and what it described as "very strong pressure" from exchange-rate factors which had undermined earnings in rubles, the real, and in sterling.
Sales by the auto division fell by 5.8 percent and by the banking subsidiary by 5.1 percent. Sales by the auto-parts subsidiary Faurecia were little changed, firming by 0.8 percent.
In the first nine months of the year, sales fell by 3.8 percent to 39.8 billion euros.
Peugeot is in the throes of a radical restructuring involving deep job cuts and the closure of a factory, and was rescued last year by means of big state guarantees for its financing and credit arm.
New projects with GM being analysed
The group began its new strategy by tying up with US group GM (General Motors).
It is now rumoured to be considering the arrival of the French state and of Chinese group Dongfeng as shareholders.
That would end the controlling interest of the Peugeot family although the business would remain under French control.
A government investigation last year found that Peugeot was in deep trouble mainly because of decades of strategic mistakes in missing many opportunities offered by globalisation.
The company is heavily dependent on the European market, which is weak, and its market share there is 11.9 percent for the first nine months of the year, down from 12.7 percent 12 months ago.
PSA says this is because it is reluctant to offer big price discounts and because of the effects of the closure of a plant and the impact of this on the Citroen C3 model.
Finance director Jean-Baptiste de Chatillon told analysts: "We are aiming for a bigger market share in Europe in the fourth quarter than in the third" thanks to rising sales of the Peugeot 2008 model.
Peugeot said that sales in Latin and America had flagged but were rising faster than the market in China.
The company said it intended to halve the rate it was using up cash in terms of operations, and in a "very significant way" in 2014.
It still counted on making further savings of 1.5 billion euros (2.0 billion) by the end of 2015 and expected to receive a boost in achieving this with a pact for competitiveness which most trades unions were ready to sign.
PSA said that one of its three projects for cooperation with GM might not work out.
This concerned the development of a joint platform for small cars which was being re-examined. The result might be a downward revision of expected medium-term savings of 1.0 billion for PSA which had been announced previously.
However "new projects are being analysed," the company said.
De Chatillon said that the revision of the GM tie-up had nothing to do with the rumours that Dongfeng might become a shareholder.