PSA Peugeot Citroën is continuing to delay a decision over the future of its Ryton factory because of the continuing strength of sales of the Peugeot 206, which is made at the West Midlands plant.
PSA chief executive Jean-Martin Folz said yesterday that the company would continue producing the top-selling 206 at Ryton at least until 2007. "We don't have to make any decision [about Ryton] in the coming months or quarters."
Although PSA has decided to continue producing the 206 for longer than the average across its product range, it will have to make a decision on the plant's future after production of the car is finally halted.
Asked if state aid would play a part in the decision about Ryton, which employs 3,900 people, Mr Folz said the company would look at a number of issues.
PSA's results have been hard hit by the strength of the euro against the pound. Mr Folz said that the company had decided to limit sales in the UK market in order to preserve profitability. "We have not participated in some cut-throat areas of the UK market."
Adverse currency movements cost the group's automotive operations €567m (£380m) last year, of which more than €300m arose from the strength of the euro against the pound.
PSA has now hedged the bulk of its sterling earnings for this year and plans to cover the rest to insure itself against any further sharp fall in the pound against the euro.
Mr Folz predicted that the first half of 2004 would see little progress; but a batch of new models would boost the group's performance in the second half of the year.
