PARIS (AP) -- Peugeot Citroen on Wednesday forecast a 10 percent drop in car sales in its core French market this year, after booking a loss in 2011, as economic conditions remain tough.
The maker of the popular Peugeot 207 hatchback and Citroen C4 Picasso minivan reported that its automotive division made a euro439 million ($578 million) loss at the operating level last year, as restructuring costs more than offset slightly higher revenue.
After including the group's car parts, financing and logistics divisions Peugeot Citroen group profit fell by almost half to euro588 million.
The carmaker gave no forecast for its 2012 earnings, but said it expects market conditions "to remain difficult in Europe," where the group makes over half of its total vehicle sales.
Peugeot Citroen forecast the European car market will shrink about 5 percent this year, after a 0.5 percent drop in 2011.
Last year Peugeot Citroen sold 3.5 million cars, 1.5 percent fewer than in 2010. In the hard-hit European market, Peugeot Citroen car sales slumped 6.1 percent, worse than French rival Renault.
Peugoet Citroen shares were little changed on the report, as CEO Philippe Varin had prepared investors for the weak performance with a profit warning last summer. In morning trading, Peugeot Citroen stock was up 0.2 percent at euro15.15 on the Paris stock exchange.
In a statement Wednesday, Varin said Peugeot Citroen would step up a cost-cutting plan announced last October, and now aims to achieve euro1 billion in savings this year. Last October the company announced plans to cut 6,000 jobs to save euro800 million in 2012.
Wednesday the company said it aims to raise euro1.5 billion through asset sales, including property and a stake in its Gefco logistics subsidiary.