PSA Peugeot Citroen's new boss Carlos Tavares vowed to halt losses and restore profitability at its core manufacturing division in 2018, as he set out a long-awaited recovery plan for the struggling French carmaker.

Unveiling his Back in the Race plan yesterday, Mr Tavares promised to achieve a 2 per cent operating margin and reverse losses in Europe and emerging markets by reducing costs, excess plant capacity and the number of vehicles on offer.

Investors welcomed a return to positive earnings goals but were sceptical at the size of the task. Peugeot shares have risen almost 50 per cent so far this year.

“While they see themselves as back in the race, they don’t seem to realise that the competition is moving forward just as quickly,” Barclays analyst Kristina Church said. – (Reuters)