July 31 - PSA Peugeot Citroen raises its 2013 cash goal, saying spending cuts and an alliance with General Motors has already begun to pay off. But as Hayley Patt reports some are saying the strategy has come too late.
It's been burning cash at a rate of 200 million euros a month. But PSA Peugeot Citroen says it's aiming to at least halve that - and soon. Europe's second-largest automaker is implementing tough spending cuts It also says its alliance with General Motors is paying off. The news sent shares soaring more than 10 percent - their highest in more than a year. Peugeot chief Philippe Varin. SOUNDBITE: Phillippe Varin, chief executive, saying (French): "In terms of competitiveness, increased ranges, new products, globalisation and finances - we've made commitments and we're keeping those commitments. And we are seeing the first signs of improvement." PSA has been the worst hit of Europe's car makers. Last year it lost 5 billion euros and the losses continued in the first half of this year. European sales fell 13.3 percent - twice the market decline. Part of the problem says auto expert Steve Fowler is failing to innovate. SOUNDBITE: Steve Fowler, editor, Auto Express, saying (English): "Over the past 10/15 years the product hasn't been good enough. There's been an influx of really good products from the likes of Korea with Kia and Hyundai and they've been targeting Peugeot and Citroen directly and the stuff that Peugeot and Citroen have been building the likes of the 307 the 308, 207 good but not good enough." In contrast its German rivals Volkswagen can't seem to put a foot wrong. They've invested an estimated $70 billion over 4 years in cutting edge technology. SOUNDBITE: Steve Fowler, editor, Auto Express, saying (English) "They were the first big group to invest in this one sort of platform technology that can be used across a myriad of different products so you'll find the platform underpinning the new Golf, Seat, Audi, Skoda. It really is very clever and cuts the cost of vehicle production quite significantly." Peugeot Citroen have plenty of work to do if they're to catch up. They're bringing out a new Peugoet 308 next year to rival VW's Golf. And there's more to come from Citreon too. But with France's economy struggling there are some who fear they may have left it too late.