PARIS, July 24 (Xinhua) -- French automotive group PSA Peugeot Citroen has announced plans to increase the prices of its cars by up to 2.5 percent in 2008 owing to rising raw material prices, the group's president Christian Streiff has announced.
Streiff, who was speaking during the presentation of the group's first-half results Wednesday, said that raw material costs had become "an industry-wide challenge" and that "price increases were necessary."
"The magnitude of our price increase for the full 2008 year will be around 2.5 percent," Streiff, who is the president of one of the world's largest car brands, told reporters during the press briefing in Paris.
According to him, the company's decision was part of additional measures that were being put in place to strengthen the development plan "Cap 2010," which is aimed at rebuilding the group's "growth and competitiveness."
Moreover, according to a statement regarding the half year results also issued Wednesday, the PSA Peugeot Citroen group has announced that it recorded a net profit increase of nearly 50 percent during the period under review, largely driven by buoyant results in the automotive division.
The groups profit earnings reached a total of 733 million euros (about 1.13 billion U.S. dollars), which represents a 49 percent increase, according to the statement.
In the statement, which paints an optimistic picture of the situation of the car market, especially in France, the group's profit earnings from the operations of the automobile division grew by 58 percent to hit 633 million euros.
The French group largely maintained its objective of increasing worldwide sales by "around 5 percent" in a range of between 3.5 and 3.6 million car units. In the first half, worldwide sales grew by 4.6 percent to hit 1.845 million units.
For the second half, the group anticipates a stronger slowdown with "markets in Western Europe expected to post a decline of around 4 percent over the year," according to the statement.
However, the group is projecting a stronger growth in its priority development markets such as China, Mercosur, Russia, where the growth is expected to stand at "about 15 percent over the year," according to the same source.
