French toast? Renault, Peugeot, and Citroen appear headed for rough 2006

After enjoying several years of growth, increased consumer awareness, and heightening critical acclaim, French automakers appear poised for a tough 2006. According to online newspaper, the companies are fighting eroding sales in Europe and grappling with diminished product margins which appear likely to affect their bottom line this year.

Executive-of-the-Moment Carlos Ghosn fears that Renault has been hobbled by an over-dependence on Megane sales in France-- what he calls the 'Fiat Syndrome: extreme dependence on one segment and one country.' The Megane, which has long been a top seller, has begun to falter, losing 30 percent in November. Peugeot's 1007 has been enduring soft sales.

Other contributing factors to a potentially lackluster 2006 include a home market whose growth isn't as robust as in years past, and an increase in the number of new models among French automakers, which can erode profitability even while boosting sales numbers.


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