CITROEN EXPECTS HIGHER PROFITS, HELPED BY AX
Automobiles Citroen expects rising
sales of its new AX compact car to help boost profits
significantly this year, continuing a financial recovery after
six straight years of losses, president Jacques Calvet said.
    Speaking to reporters during weekend trials for the new AX
sports model, he said: "All the budgetary forecasts that we have
been able to make ... Show a relatively significant improvement
in 1987, compared with 1986," he added.
    Citroen, part of the private Peugeot SA <PEUP.PA> group,
increased its share of the French new car market to 13.7 pct in
first two months 1987 from 12.1 pct a year earlier. It is
aiming for an average 12.8 pct share throughout the year after
11.7 pct in 1986.
    The firm believes it is on target to raise its share of the
European market, excluding France, to 3.2 pct this year from
2.9 pct in 1986.
    "Our first problem is to produce enough vehicles to meet the
demand," Calvet said. "This is a relatively new problem for us."
    Citroen lost close to two billion francs in 1984 but cut
the deficit to 400 mln in 1985, helped by moves to modernise
its range and improve productivity.
    Calvet indicated last December he expected Citroen's 1986
profit to be between 250 and 500 million francs.
    This weekend he said that those profit estimates "remain
about the same -- perhaps even a little more optimistic."
    Some of this optimism is due to the early success of the
AX, launched on the French market last October. It will be
available throughout most of western Europe within four months.
    The car has registered just over 20,000 sales.
    It is being built at Citroen's large plant at Aulnay-sous-
Bois in northern Paris, as well as at Rennes in Brittany and
Vigo in Spain, with production just reaching target level of
1,000 cars a day.
    The car, which Citroen markets as an intermediate model
between its long-running 2CV and the Visa, is designed to
compete with the Renault 5, Volkswagen Polo and Opel Corsa.
    The AX had built up its market share in France to around
four pct last month. Calvet said: "Our hope is that once the AX
is fully developed, we will have between 6.5 and seven per cent
of the national market."
 REUTER
