Peugeot Citroen no longer has a place on the Cac 40

Published:  10 Sep at 9 AM

Peugeot Citroen, the French automotive company, has been told that after 24 September it will no longer have a place on the Cac 40 index. The announcement is an embarrassment for a firm, which was one of the founding members of the index 25 years ago.

Peugeot’s place on the Cac 40 is to go to Solvay, the Belgian chemical producer. The company’s demotion follows several years of falling share prices driven by a drop in sales. During the first six months of this year, Peugeot Citroen declared a 13 per cent fall in sales. The value of the manufacturer’s shares has also fallen by 61 per cent.

Following the poor first-half performance, Europe’s second biggest car maker announced that it would be reducing its workforce by 8,000. This is in addition to the 3,500 job cuts the firm announced in 2011. Peugeot will also be closing it Aulnay plant, one of two factories the company has in Paris.

Peugeot Citroen could see its stock suffer further now that it is no longer trading on the Cac 40 as it will not be included in exchange traded funds or purchased through index tracking.

Diamant Bleu Gestion, a Paris-based fund manager, said being removed from the Cac 40 was punishing for a company and showed that management had failed to keep up the required level of performance. Peugeot Citroen said that it aims to be back to breaking even within two years.