Moody's downgrades Peugeot Citroen to junk status

Just one day after announcing a global strategic alliance with General Motors (GM), PSA Peugeot Citroën's credit rating was reduced to rubbish by Moody's on March 1st, from Baa3 to Ba1, and the outlook was negative.

According to the “Financial Times” report, CCFA data from the French Association of Automobile Manufacturers showed that in February, Peugeot’s light vehicle sales in the French home market decreased by 18% year-on-year. Among all large car companies, sales of Peugeot and Peugeot’s Opel have fallen the most, at 25% and 29% respectively.

Moody’s stated: “We have noticed that past mergers and acquisitions and alliances in the automotive industry generally did not produce the expected competitive advantages and results of improved performance.” Last month, Peugeot announced the increase in net debt of 2.2 billion euros in 2011, and was included in the observation by Moody's. List.