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Peugeot chief keeps door open to partnerships

[PARIS] French carmaker PSA Peugeot Citroen, placed ninth in the world by vehicle sales, is open to potential partnerships but must complete its restructuring first, its chief executive said on Wednesday.

Carlos Tavares was asked on BFM Business radio whether scale was a problem and whether the company could continue to develop from such a small base. "For us all the options are open, and they are wide open, but we cannot get to that point where we can use these wide, deep and promising opportunities until we have completed the restructuring of the company," he said.

"That will be done within two or three years ... things have to be firmly back in order before we can embrace our future and look at all the possibilities." Speaking ahead of the Paris car show, Mr Tavares noted that Japan's Honda is similar in size and exists alone without any difficulty.

In July, Peugeot reported a surprise surge in first-half cash flow and the first auto-division profit in three years, leading analysts to say its turnaround plan had begun to show results.

Peugeot sold stakes to China's Dongfeng and the French state earlier this year as part of a 3 billion euro (US$3.78 billion) share issue, after racking up losses of 7.3 billion in two years.

Mr Tavares pledged soon afterwards to trim the model line-up by almost half, cut capacity, raise pricing, and pare wage and component costs[to lift the automotive operating margin to 2 per cent in 2018 and 5 per cent by 2023. - Reuters