Peugeot Citroen, Europe's second largest carmaker, yesterday vehemently denied it was in merger talks with a rival as it revealed a 53% rise in pre-tax profits to €1.67bn (£1bn) and set bold targets for growth this year.
The French car group, which sold 550,900 206s last year, plans to sell 700,000 this year and said demand is so strong that it cannot make enough of the models at its Ryton plant, near Coventry - the most productive in the group.
Jean-Martin Folz, the group's executive chairman, said Ryton, which has three weekday shifts and one at the weekends, had a long-term future even though the pound remained at historically high levels. "From a strictly industrial point of view," he said, "I wish the UK would join the euro as soon as possible as the so-called single market is split into two different zones and this is undesirable."
Mr Folz joined forces with Pierre Peugeot, head of the family's interests, to denounce a spate of market rumours that the group is about to merge with DaimlerChrysler or be taken over by the US-German group or another American rival.
Mr Peugeot, who chairs the group's supervisory board and whose family owns 35% of the voting shares and 23% of the equity, decried "perfectly indecent" reports that it was split over the issue of selling its stake to a would-be predator.
In an unprecedented public intervention, he told a news conference that the family was "entirely welded together" on the issue and fully backed the independence strategy pursued by Mr Folz.
Mr Folz, insisting there had been no contacts with Daimler, said the speculation was "perhaps a form of manipulation" and "it is difficult to say where the borders lie between information and malevolent misinformation."
The Peugeot chairman set targets of 2.7m sales, operating margins of 4% for the car business and group earnings of €1.9bn for this year - which will see a fresh share buy-back, further cuts in operating costs and a 24% rise in spending on R&D.
He held out the prospect of cuts in prices for both Peugeot and Citroen models in the UK though he said his group planned no dramatic initiative. "If the pound remains at these levels this would mean a drop in UK prices," he said.
The group, which confirmed plans to produce 75% of its models on just three "platforms" by next year, is to launch in Geneva next week a "multi-media" Citroen enabling the driver to surf the internet.
The launch, given by Mr Folz and Jean-Marie Messier, head of Vivendi, the French media and telecoms group, comes ahead of UK plans for online buying and selling of both Peugeot and Citroen models in the coming months.
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