Peugeot Citroen Hit By Record £4.29bn Loss
Embattled French car firm Peugeot Citroen has made a loss of 5bn euros (£4.29bn) for 2012, the worst result in its history.
But France's number one automaker said it had built the foundations for recovery after cleaning up its balance sheet and implementing a tough restructuring plan.
Peugeot blamed the results on a previously announced 4.7bn euro (£4bn) asset writedown last year and the crisis in the European car market.
The loss compared with a profit of 588mn euros (£505m) in 2011, while revenue for the year fell 5.2% to 55.4bn (£47.6bn) euros.
The results "reflect the deterioration of the automotive industry environment in Europe," chief executive Philippe Varin said in a statement.
But he added: "The foundations for our rebound have been laid."
According to What Car? editor-in-chief Chas Hallet, the firm suffers from combination of problems.
"Peugeot Citroen is losing out in several ways. For a start, its models mainly compete with each other, which makes little sense," Mr Hallet told Sky News.
"It is being undercut on price and quality by rivals, including the incredibly strong Korean makers. And unlike many of its rivals it does not sell cars globally and so take advantage of the scale that provides.
"Furthermore, it can't really compete with the might of the VW group, in Europe or anywhere else."
The results were worse than forecast by analysts and overshadowed the previous record loss of 1.2bn euros (£1bn) in 2009.
Net debt stood at 3bn euros (£2.5bn), the company said.
On Monday, the European Commission authorised France to shore up Peugeot temporarily to the tune of a six-month 1.2bn euro guarantee.
Peugeot Citroen, which has a strategic tie-up with General Motors (GM) of the US - itself bailed-out by the Obama administration - is in the midst of a restructuring involving deep job cuts.
Markets reacted positively to the balance sheet announcement, with shares up 5% in early trading.