Peugeot Citroen posts return to profit in 2010

By GREG KELLER AP Business Writer

PARIS (AP) - PSA Peugeot Citroen said Wednesday its earnings rebounded in 2010 from record losses in 2009 as the French car maker benefited from healthy demand in China, Latin America and other developing markets.

France's largest car maker made net profit of euro1.1 billion ($1.5 billion) in 2010, compared to a net loss of euro1.2 billion in 2009, the company said in a statement.

The maker of the popular Peugeot 207 hatchback and Citroen C4 Picasso minivan warned that 2011 "is likely to remain challenging in European markets," but earnings will be supported by new developments in China and India.

Peugeot Citroen sales rose 15.8 percent last year to euro56 billion, helped by a raft of new models and strong sales outside of the car maker's depressed European home market.

The company forecast market growth in China to reach 10 percent this year, offsetting a stable expected market in Europe. Peugeot Citroen is increasingly looking beyond Europe, with sales outside the continent reaching 39 percent of total sales last year, up from 34 percent in 2009.

In a separate statement Wednesday, Peugeot Citroen said it's close to choosing a site to build its first factory in India, with the goal of boosting the share of sales outside Europe to 50 percent by 2015. The Indian plant will produce a mid-size family sedan, Peugeot Citroen said.

Peugeot Citroen's earnings rebound after two years of hefty losses was helped by far lower restructuring costs. The company spent euro727 million on restructuring in 2009, mainly to finance 11,000 job cuts.

Peugeot Citroen was bailed out by the French state in 2009, along with rival French car maker Renault. Each company won a loan of euro3 billion as part of a government rescue effort for the auto industry, and both returned to profit in the first half of 2010 after a bruising couple of years in the car sector worldwide.

Peugeot Citroen has already repaid euro1 billion, and said it will complete repaying the remaining euro2 billion by the end of April.

Last year Peugeot Citroen sales rose 13 percent to a record 3.6 million.