CHIBA, Japan -- French carmaker PSA/Peugeot-Citroen is sticking to its 2005 earnings targets, Chief Executive Jean-Martin Folz told reporters at the Tokyo auto show on Wednesday.
"We have no reason to modify what we said earlier," he said.
When releasing first-half results, France's biggest carmaker said it was aiming for an operating margin of 4.0 percent to 4.5 percent this calendar year.
"We certainly cannot be any more optimistic. The European market is still really flat. The raw material issue is more and more important," he said.
"We have been through high growth in steel prices. We are now looking forward to growth in plastic prices following the oil shock. So we certainly have negative factors on production costs.
"And the European market, which still is our major market, is certainly turning very competitive with some strong promotional effort by some of our competitors."
Folz said PSA was in the process of renegotiating steel contracts for years to come.
"It is very tough issue and we are discussing with nearly all producers worldwide. What we can see with some satisfaction is that some real competition seems to progressively appear in the steel market, which is rather new. We hope to benefit from this new situation of competition between steel manufacturers," he said.