PSA entered China years after Volkswagen and has no luxury brand in its portfolio.
While PSA counts on its home region for 62 percent of volumes and a bigger, undisclosed share of earnings, Fiat's European exposure is diluted by its majority stake in Chrysler Group, and Renault's by a 43.4 percent holding in Nissan Motor Co. that brings dividend earnings from China, India and North America.
'Thrown in towel'
VW's first-half earnings before interest and taxes more than doubled to 6.09 billion euros on rising demand in China. Peugeot's operating profit in the period was flat at 1.16 billion euros.
"That was a big disappointment after everything we'd heard about the new models," said Lionel Heurtin, who helps manage 1.5 billion euros in equity investments for Paris-based OFI Asset Management and trimmed his Peugeot holding by one-fifth on Sept. 12. "I've more or less thrown in the towel."
To be sure, others see PSA's share-price plunge as a buying opportunity, provided that the worst macro-economic concerns prove to be exaggerated.
"The valuation is compelling," said Albrecht Denninghoff, a Frankfurt-based analyst at Silvia Quandt Research GmbH who recommends buying the stock. "With the right trigger, it could flip from the sector's worst performer to the best."
'Reduced to mid-cap'
PSA has a "stable shareholder structure and a strategy based on long-term vision, not market valuation," spokesman Pierre-Olivier Salmon said when asked about the family- controlled company's share performance.
The prospect of another economic slump "reinforces our strategy rather than undermining it," he said.
The carmaker declined to make executives available for interviews for this story.
VW is increasing the pain for PSA with lower-priced vehicles in smaller-size categories traditionally dominated by the French and Fiat. After revamping the Polo subcompact in 2009, VW will introduce the Up minicar at the end of 2011.
PSA was the first European carmaker to announce belt-tightening measures in anticipation of a renewed slump. Varin told reporters Sept. 13 that he was preparing to cut temporary contracts accounting for 10 percent of domestic manufacturing workers.
VW is still adding extra shifts at German factories to keep up with demand for its models outside the region.
With investors concerned about PSA's future profitability as Europe's economy slumps, the carmaker last week dropped to the bottom ranking on France's main market index.
"It's astonishing to see Peugeot effectively reduced to a mid-cap," said Valerie Cazaban, who helps manage $100 million in assets including Peugeot stock for Paris-based Stratege Finance. The possibility of relegation from the benchmark index may now be "weighing the stock down further," she said.