VELIZY-VILLACOUBLAY, France (AP) -- French carmaker PSA Peugeot Citroen on Thursday raised its outlook for 2009 and unveiled a host of new models, part of a three-year plan to boost earnings by euro3.3 billion ($4.95 billion) through cost cuts and higher sales.

CEO Philippe Varin revealed the new cars and plan at a glitzy presentation to investors, where mobile phones were confiscated to prevent photographs of the first public viewing of the cars.

The models included the new Citroen DS series of high-end small cars designed for monied urban customers, to be launched in 2010, the electric C-Zero and Peugeot iOn available next year, and a small Peugeot pickup truck aimed at the Brazilian market for trips to the beach or countryside.

The vehicles are designed to meet a changing market place with more environmentally conscious urban dwellers, older customers and Asian drivers.

By adapting its offering, Peugeot Citroen hopes to gain market share and close the profitability gap with its competitors.

About 55 percent of its euro3.3 billion plan should come from cost cuts, Varin said. This will include shrinking the French work force by an additional 10 percent -- or 6,000 jobs -- by 2012 through attrition. That's on top of 5,000 voluntary redundancies this year.

A further 30 percent should come from efforts to boost its market share in Europe through new models, more corporate contracts, and new programs such as Mu -- a scheme in which Peugeot customers can buy prepaid cards giving them temporary access to a range of vehicles.

Growth markets will make up for the final 15 percent of the earnings plan. Peugeot Citroen aims to increase its offering in China with the launch of new sedan models, and build market share in Brazil.

The Paris-based car maker said it has revised its 2009 forecasts "significantly upward" after recent improvements in the auto market look set to boost fourth quarter production.

The news caused shares in PSA Peugeot Citroen to jump, although they fell back later in the day. In Paris afternoon trading, shares were up 2.9 percent at euro24.46.

Horst Schneider, an analyst with HSBC, said the new 2009 forecasts exceed the market consensus. Peugeot Citroen "now needs to deliver," he said, noting that the performance plan depends on volumes, which in turn depend on the economic recovering.

The company now expects recurring operating income -- a measure of earnings from ongoing operations excluding one-time costs and gains but including taxes -- for the second half to break even after a loss of euro826 million ($1.24 billion) in the first half.

Previously, it had said it expected to make an operating loss this year of between euro1 billion and euro2 billion.

Production in the fourth quarter will be 30 percent higher than a year ago, and 17 percent more than the third quarter, the car maker said in a statement. Full-year free cash flow should be positive, the auto maker said.

"Our stepped-up efforts to enhance productivity and improve performance will enable us to catch up with our best in class competitors and return to growth," said Varin, who was appointed to improve performance after former CEO Christian Streiff was ousted.

"With the group's much improved financial position in the second half of 2009, the plan will give us the flexibility needed to achieve our ambitions."

Champagne and expensive nibbles were served after the presentation west of Paris -- perhaps a bid for optimism that the worst is over for the automotive industry.

Varin said his priority is to grow by implementing these changes, but didn't rule out partnerships or acquisitions provided Peugeot Citroen remains independent and the add-ons provide real synergies.

Only last month, Peugeot Citroen reported a 7.7 percent drop in third quarter revenue.

Government cash-for-clunkers programs across Europe kept car sales rising in July and August amid a gradual economic recovery, but buyers outside Europe had been holding off.

Makers of smaller cars including Peugeot Citroen are benefiting most from the higher sales.

Peugeot Citroen expects the European market to be down by 7 percent this year. Recovery won't come until the second half of next year, the car maker said.

"The acceleration and improvement seen in the last weeks and months does not change our view for 2010," Varin said.