By Jason Chow
PARIS--French car maker PSA Peugeot Citroën announced a smaller
loss in 2014 as strong sales in China and cost-cutting efforts
improved the company's results, though it warned that its Latin
American and Russian operations would continue to struggle in the
year ahead.
The company's net loss narrowed to EUR555 million ($633.4
million) from EUR2.23 billion in 2013, while revenue rose to
EUR53.61 billion, up from EUR53.08 billion.
"Our 2014 results show evidence that the process of rebuilding
the group's financial fundamentals is underway," said Peugeot Chief
Executive Carlos Tavares in a statement, adding that the company is
"ahead of our restructuring plan."
Unit sales were up 4.3%, boosted by an 12% gain in China, making
the country now the company's most important, ahead of its home
market of France.
Peugeot has been struggling to return to profitability and was
in financial dire straits last year, requiring a EUR3 billion
capital injection from the French national government and Dongfeng
Motor Group Co., both of which took 14% stakes in the company.
Mr. Tavares, who took the helm last year, put in place a
three-year restructuring plan in a bid to steer the company out of
its deep losses. He slashed costs by reducing the amount of
vehicles produced to 26 from 45, cut back on research and
development, and held firm on pricing.
Already, the automotive division, which was bleeding money in
previous years, has started to show improvement, with an operating
income of EUR63 million, compared with a EUR1.05 billion operating
loss in 2013.
Still, the auto division is far from its goal of 2% operating
profit margin by 2018. In 2014, that margin was at 0.2%.
The company's utilization rate in Europe rose to 79% in 2014
from 72% during the year before, the company said.
For 2015, Peugeot said it expects auto demand to increase 1% in
Europe and 7% in China. However, it forecast Latin America would
decline 10% while Russia could go down by around 30%.
Write to Jason Chow at jason.chow@wsj.com
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