French carmakers post weak sales

Peugeot is hoping to lure customers with new models

Struggling French carmakers Peugeot-Citroen and Renault have both posted dull sales for the first half of the year on slow demand in Europe.

Peugeot, Europe's second biggest car firm, sold 500 cars less over the period than in the same time last year, while Renault sales dropped 3.8%.

But both firms expect strong demand for their new models, which are expected to arrive on the market later in the year.

By contrast, Volkswagen said Audi sales rose 9.8% from January to June.

Rebound on the way?

Peugeot-Citroen sold 1,764,000 of its cars worldwide, compared to 1,764,500 in the same period one year ago, but the auto company said it expected to see a rebound in the second half of the year - led by strong demand for its new Peugeot 207 and the Citroen C4 Picasso models.

The company, which trails Volkswagen in Europe, has struggled in recent years to keep up with its German and Asian competitors.

It announced in April that it planned to axe 4,800 jobs in France - its home market - through voluntary redundancies as part of an aggressive cost-cutting programme.

But despite lacklustre sales, Peugeot was still ahead of its local rival Renault, where car sales were down 46,990 at 1.27 million vehicles worldwide in the first six months of 2007. Of that decline, the worst was in Europe where sales fell 9.1%.

Renault has been focusing on emerging markets to grow its business so as to become less reliant on the saturated car market of Western Europe, but it still hopes that its new Twingo and Laguna designs will win over European customers.

German firm Volkswagen, meanwhile, said sales of its luxury marquee Audi topped the half a million level over the first half - up 9.8% - and said its target would be to sell a million of the brand in 2008.