Peugeot sees west Europe market fall

By Marcel Michelson

PARIS (Reuters) - PSA Peugeot Citroen, Europe's second biggest carmaker, said on Tuesday it expected a slowdown in west European auto markets to worsen and forecast a four percent decline in vehicle sales for the whole of 2008.

The outlook is in line with consultants J.D. Power Automotive Forecasting which said on Friday it expected vehicle sales to fall four percent in 2008 and 1.3 percent in 2009, from a previous outlook of a decline of 2.1 percent for 2008.

It blamed a 'toxic' mix of falling asset prices, slowing economic growth, financial crisis and rising inflation.

Peugeot Citroen (PEUP.PA: Quote, Profile, Research), second to Volkswagen (VOWG.DE: Quote, Profile, Research) in passenger car sales, did not give reasons for its outlook but called the economic environment 'tough'.

It shares fell 3 percent in early trade on Tuesday.

But in its priority growth markets, the Mercosur area in south America, China, Russia and Eastern Europe, it expected a double-digit growth rate for the full year, the company, Europe's biggest maker of light commercial vehicles, said.

PSA maintained its target of global consolidated sales growth of around 5 percent in 2008. This compares to a 4.6 percent growth in vehicle and completely knocked down CKD.L units to 1.84 million for the first half while assembled vehicle sales were up 0.5 percent to 1.7 million units.

It said its first-half sales were underpinned by its Peugeot 308 and Citroen C5 models as well as sound sales of the Peugeot 207.