French car giant PSA Peugeot Citroen has cut 1,000 temporary staff at its Chinese venture after sales declined.

The workers were mainly on short-term contracts, which weren't renewed from last Saturday, Alexis Vannier, a Beijing-based Peugeot spokesman, said yesterday. The venture, part-owned by Dongfeng Motor Group Co., previously employed 9,000 people.

Peugeot, like Volkswagen, has trimmed production in China after industry-wide sales fell for the first time in three years in August and September because of a slowing economy and a stock-market slump.

Peugeot cut its full-year earnings target and said production will be slashed 30 percent last month following a "collapse" in global demand.

"Almost all of the car makers in China are concerned by the slowdown in the market," Vannier told Bloomberg News.

"Most of the car makers are reducing production and staff at their factories."

Dongfeng Peugeot Citroen Automobile Co.'s car sales to dealers fell by 6.2 percent in the first nine months from a year earlier to 140,922, according to the China Association of Automobile Manufacturers.

That compares with an 11-percent increase for the overall market.

Greater efficiency and improved manufacturing processes also contributed to the reduction in staff numbers, according to Hu Xindong, a spokesman for Dongfeng Motor.

The car maker's ventures with Nissan and Honda are not firing workers, he added.

The company, China's third-largest auto maker, rose 2.46 percent to close at HK$2.08 in Hong Kong trading yesterday. The stock has lost 61 percent this year, compared with a 45-percent decline for the Hang Seng Index.

(Shanghai Daily November 6, 2008)