Peugeot predicts European car market will fall this year

French car company PSA Peugeot Citroen yesterday forecast that Europe's car market will shrink by a further nine per cent this year as the company reported massive losses in 2009.

"In 2010, we expect the market conditions to be challenging, with a European market down nine per cent," chief executive Philippe Varin said in a statement.

The company reported a net loss of €1.161 billion in 2009, triple the loss of €363 million a year earlier.

But results were better in the second half of the year as sales in Europe picked up thanks to government incentives, with an operating profit of €137 million after an operating loss of €826 million in the first half. 2009 was "a highly contrasted year," the earnings statement said. Car sales fell in Europe and the United States last year because of the global economic crisis but the full fallout for the industry has been averted by government trade-in schemes to encourage people to buy cars.