Peugeot raises earnings forecast

Peugeot Citroen, Europe's second-biggest carmaker, has raised its earnings forecast for 2009 on the back a revival in the car market.

The news comes a month after the firm reported lower-than-forecast third-quarter sales, down 7.7% on 2008.

Peugeot said: "The group's production and sales performance is significantly stronger than forecast."

The group predicted fourth-quarter output would be 30% higher than the same period last year.

'Most conservative'

The firm put its more upbeat outlook down to "recent improvement in the automobile market and the ongoing success of the new Peugeot and Citroen models".

Analyst Adam Jonas at Morgan Stanley said that Peugeot had previously put out the "most conservative second-half guidance of any European [carmaker] this year".

Government schemes to encourage car purchases have boosted car sales in Europe and the US, but there are fears that demand will fall again when this support is withdrawn.

Last month, Peugeot Citroen said sales in Europe were healthy thanks to these various government-backed scrappage schemes, but that this had been offset by sales falls in Russia and Latin America.

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