The chairman of PSA Peugeot Citroen has today (April 8th) added his voice to those who believe demand for cars is set to fall.

Speaking at a ceremony to mark the start of work on a new production unit in northern France, Jean-Martin Folz said he expected sales in Western Europe to be at the lower end of an earlier forecast as a result of the war in Iraq.

At the beginning of the year Mr Folz said he expected the European car market to dip between zero per cent and two per cent during the year, a prediction to which he referred.

'I predicted between zero and two per cent barring any international upheaval. The upheaval has happened, and without a doubt there will be repercussions for the western economy. We will be in the bottom end of my forecasts,' Folz commented.

He went on to argue that whilst there was a greater chance than before that the European car market might suffer a devastating 15 per cent fall, such a worst-case scenario remained unlikely.

PSA Peugeot Citroen is the latest company in the auto industry to express fears that demand would decline following announcements by General Motors and Nissan.