Peugeot upbeat on profit targets

Peugeot is having to overhaul its business

Carmaker Peugeot Citroen has unveiled a rise in 2007 profits and says it is on course to meet targets to double profitability by 2010.

Europe's second-biggest carmaker said net income rose to 885m euros (£657.4m; $1.3bn) up from 183m euros.

Profit margins grew to 2.9%, up from 2% in 2006 - a level that chief Christian Streiff had described as a "heresy".

Last year, the firm unveiled a major restructuring programme, with plans to cut its European workforce by 8,000.

Peugeot's shake-up, which also features a greater focus on emerging markets, was prompted by weak 2006 global sales and a sharp drop in profits.

The company aims to make 4 million vehicles by 2010, with an operating profit margin of between 5.5% and 6%.

And it has now set a profit margin target of 3.5% for 2008, when it expects to see a slight decline in the European car market.

It also predicted that growth in its emerging markets - which include Eastern Europe, China, Russia and the Mercosur region - would slow during 2008, although the growth rate would remain in double digits.