PARIS -- PSA/Peugeot-Citroen CEO Christian Streiff said the auto industry is caught up in a catastrophe that has spread across the globe as even the key emerging markets that manufacturers had banked on for growth have now ground to a halt.
"What is striking at the moment is the worldwide catastrophe in the car industry because the Brazilian market, the Chinese market and the Russian market have stopped in their tracks just like the European market. That makes for a fall of over 20 percent," Streiff told RTL radio.
Streiff expects PSA group sales to fall 20 percent in 2009 and sees further pain in 2010 as the global slowdown persists.
"The outlook for 2009 is terrible. We are working on the assumption that the market in 2010 remains difficult," Streiff said.
PSA is due to publish 2008 financial results on Wednesday and the average expectation for earnings before interest, tax depreciation and amortization (EBITDA) from 17 analysts polled by Reuters is for 5.78 billion euros, down from 7.89 billion in 2007.
PSA has been hard hit in recent months as the credit crunch and worsening economic climate slowed car sales in Europe. The carmaker relies heavily on the European market.
The CGT labor union said that writedowns and provisions would lead PSA to report a net loss, having made a 733 million profit in the first half.
A spokesman for the company had no comment.
PSA said last month that sales of finished vehicles fell 8.7 percent to 2.95 million units during 2008.
Sales of complete-knockdown kits -- principally to carmakers in Iran -- rose by 58.7 percent to 308,000 units. The combination of these results led PSA to declare 2008 sales down by 4.9 percent to 3.26 million units.
The French carmaker found some respite Monday when the French government offered it 3 billion euros in low-cost loans and an additional 500 million credit line for its cash-strapped finance company.
The government offered equal financing to domestic rival Renault with the condition that the two carmakers do not cut jobs at their French factories.
The aid package has drawn concern from many of France's European partners, who have accused Paris of unfair state aid to industry and protectionism.
The Brussels-based European Commission must still review the French aid package. France is the latest European country to pledge to help its automakers -- Italy on Friday promised 2 billion euros for the flagging sector.