Business

Peugeot shares fall after drop in sales figures

Shares in French car giant Peugeot fell 6% in morning trade after the company reported a 13% fall in first-half sales.

The firm is considering a new round of cost-cutting measures which could include closing a factory.

Worldwide sales fell to 1.62 million vehicles in the first six months of this year, compared with 1.86 million in 2011.

The news sparked falls in other major carmakers' shares.

The company said in a statement that the eurozone debt crisis was having a marked effect: "The Peugeot and Citroen brands' traditionally strong markets, France, Spain and Italy, are in profound crisis."

European sales fell by 15%.

Peugeot, which is Europe's second-biggest car maker, is preparing to reveal cuts in staff numbers that could run into thousands.

Shares in BMW and Daimler were down by 3% after the news, while tyre-maker Michelin was down 1.5%.

Volkswagen was unaffected, as its shares are still buoyed by news of its takeover of Porsche.

Savings

Earlier this year, Peugeot announced a 1bn-euro (£800m; $1.2bn) savings programme on top of headcount cuts of 6,000 announced last November.

There have been press reports that the company had been seeking an emergency loan from the French government, something Peugeot denied.

Earlier this year, Peugeot entered into an alliance with GM of the US, under which GM takes a 7% stake in Peugeot, making GM the second-biggest shareholder in the French firm after the Peugeot family.

Peugeot's chief executive, Philippe Varin, is expected to meet staff representatives to talk about the cuts at a works council meeting next week.

The company's first-half results will be released on 25 July.

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