Aug.27 - Recovery hopes have Peugeot stocks soaring, but is the rally is sustainable and when we can see meaningful growth return to Europe's auto market? Ciara Sutton reports.
It's been the worst casualty of the shrinking European car market, but now Peugeot says it's back on track. The company's stock has doubled in value since July as recovery hopes grow. Peugeot's brand CEO Maxime Picat says the new cars it's introducing have helped. (SOUNDBITE) MAXIME PICAT, PEUGOUT BRAND CEO, SAYING (English): "Thanks to our new launches we are quite confident there will be a growth in the second half of the year. For our performance we have already 40,000 orders of our 2008 and we are launching today our brand new 308." The success of that model will be crucial. Peugeot reported a net loss of 5 billion euros last year. It's aiming to reduce the amount of cash it spends, and continue with cost-cutting which includes closing a factory and cutting over 11,000 jobs by 2015. Peugeot may be Europe's second largest car maker but it's China where sales have surged. It's opening a fourth plant there, as part of a partnership with local company Dongfeng. Peugeot says it's not concerned by the slowdown in some emerging economies (SOUNDBITE) (English) brand CEO MAXIME PICAT, SAYING: "We see that the situation with Russia is difficult, but we've got a very strong position with faster improving countries like Algeria, Argentina, China. Which help us to go very fast towards our target of having 50 percent of our sales outside Europe in 2015." Overall the European car market is improving as the region takes tentative steps out of recession, with car makers in the UK, Spain and Germany all reporting more positive results. But any stabalisation in the industry is yet to be matched by employment, meaning cost-cutting remains high on the agenda.