CITROEN EXPECTS HIGHER PROFITS, HELPED BY AX

  Automobiles Citroen expects rising
  sales of its new AX compact car to help boost profits
  significantly this year, continuing a financial recovery after
  six straight years of losses, president Jacques Calvet said.
      Speaking to reporters during weekend trials for the new AX
  sports model, he said: "All the budgetary forecasts that we have
  been able to make ... Show a relatively significant improvement
  in 1987, compared with 1986," he added.
      Citroen, part of the private Peugeot SA &lt;PEUP.PA> group,
  increased its share of the French new car market to 13.7 pct in
  first two months 1987 from 12.1 pct a year earlier. It is
  aiming for an average 12.8 pct share throughout the year after
  11.7 pct in 1986.
      The firm believes it is on target to raise its share of the
  European market, excluding France, to 3.2 pct this year from
  2.9 pct in 1986.
      "Our first problem is to produce enough vehicles to meet the
  demand," Calvet said. "This is a relatively new problem for us."
      Citroen lost close to two billion francs in 1984 but cut
  the deficit to 400 mln in 1985, helped by moves to modernise
  its range and improve productivity.
      Calvet indicated last December he expected Citroen's 1986
  profit to be between 250 and 500 million francs.
      This weekend he said that those profit estimates "remain
  about the same -- perhaps even a little more optimistic."
      Some of this optimism is due to the early success of the
  AX, launched on the French market last October. It will be
  available throughout most of western Europe within four months.
      The car has registered just over 20,000 sales.
      It is being built at Citroen's large plant at Aulnay-sous-
  Bois in northern Paris, as well as at Rennes in Brittany and
  Vigo in Spain, with production just reaching target level of
  1,000 cars a day.
      The car, which Citroen markets as an intermediate model
  between its long-running 2CV and the Visa, is designed to
  compete with the Renault 5, Volkswagen Polo and Opel Corsa.
      The AX had built up its market share in France to around
  four pct last month. Calvet said: "Our hope is that once the AX
  is fully developed, we will have between 6.5 and seven per cent
  of the national market."
  

