Peugeot announces its best UK profits for eight years, following a record sales performance in 1998.

The company made £52.9 million pre-tax profit (£36.5 million after tax) on a turnover of £2.39 billion. This was the highest profit since 1990, despite the heavy costs of the UK manufacturing and commercial launch of the new Peugeot 206 range, and despite increased spending due to the highly competitive market for new and used vehicles.

The profits will trigger a £1.2 million bonus payment to be shared amongst the company’s UK employees under the company’s profit-related pay scheme – a lump sum of about £240 tax-free for the average production worker.

Managing Director, Mr Richard Parham, commented:

"This was a tremendous all-round industrial and commercial performance by our UK workforce, particularly since we have deliberately absorbed all the high launch costs related to the introduction of the new 206 range at our Ryton plant in our 1998 financial figures."

Peugeot sold 181,564 cars in the UK (up 8.4%) and raised market share to a record 8.08%. the 106, 306 and 406 ranges all achieved their best ever sales, while the new 206 range achieved an unprecedented sales launch, attracting more than 10,000 sales in less than two months.

The 206 launch was also the most successful in Peugeot’s UK manufacturing history, with the Ryton factory achieving, in record time, the required levels of production and quality.

Since launch, runaway demand for the 206 – more than 300,000 have been sold across Europe – has forced a radical increase in production in the UK and France. A third shift, involving the creation of 900 new jobs, will start in the next two weeks at Peugeot’s Ryton plant and extra output is planned at Peugeot’s Mullhouse plant in France.

By mid-April, total 206 production will be 12,000 cars a week, including 3,400 in Coventry. And by the end of this year, the giant Peugeot plant at Poissy, near Paris, will also start building the 206 range, adding a further 1,000 cars to the weekly production total.

Added Mr Parham:

"As well as achieving an outstanding sales launch for the new 206, performance of the Peugeot 106 was exceptional for a seven-year-old model, while 306 became the first Peugeot ever to achieve over 70,000 sales in one year. We also achieved record light commercial vehicle sales with strong performances from the Peugeot Partner and Expert vans."

He also commented:

"While there were many successes in 1998, we must continue to strive for increased profits to enable us to compete effectively in the future."