Europe's second biggest car maker, Peugeot Citroen, said its recovery had started, reporting an operating profit margin of 2.7 per cent in the first half of 2007 up from 2.4 per cent a year ago.
It said the improvement was due to higher sales prices, cost cuts and purchasing gains. Market share also improved, and the margin figure beat an average analysts' forecast of 2.5 per cent.
Peugeot said it expected at margin for the second half of 2007 of at least 2 per cent, up from 1.6 per cent last year.
In 2006, PSA cut performance targets several times.
A company spokesman said the second half was traditionally weaker than the first, due to slow sales months in July, August and December, and the second-half margin was usually 0.85 points below that of the first.
"The two major challenges for the second half of the year are to continue to succesfully launch new models and to accelerate the drive to greater competitiveness," chief executive Christian Streiff said in a statement.