PARIS -- French carmaker PSA/Peugeot-Citroen said on Thursday it saw its 2005 operating margin at around 4.0 percent of sales, versus a previous range of 4.0 percent to 4.5 percent, after weak third-quarter sales.
The world's sixth-largest automaker said that in an "aggressive competitive market" in Europe, it expected only limited growth in unit sales and it would reduce its production program significantly to bring inventories back to target.
The margin was 4.1 percent of sales in the first half.
Peugeot reported third quarter group sales of 12.765 billion euros ($15.47 billion) and car sales of 10.166 billion euros, falling short of analysts' forecasts.
The average forecast for group sales in a Reuters poll was 12.92 billion euros, while that for auto sales was 10.37 billion.
For the first nine months of this year, PSA said group sales rose 1.3 percent to 41.771 billion euros and car sales were up 1.4 percent to 33.541 billion, with world-wide unit sales up 1.1 percent to 2,504,000 vehicles.
It said it expected to meet its target of 600 million euros in annual production cost savings, but raw materials will have a negative impact of around 300 million euros.
Apart from the costs of production cuts, there is also a 49.5 million euro provision for a European Commission fine related to car exports from the Netherlands.
Domestic peer Renault SA on Wednesday posted a smaller-than-expected rise 1.04 percent in third-quarter sales to 9.54 billion euros.