PSA Peugeot Citroen is finding the European car market tougher going than expected, according to CEO Jean Martin Folz at the company's annual shareholders meeting.

The shareholders were told that hitting its 2003 profit target would be difficult because of the continued decline in the European car market and the appreciation of the euro, according to Bloomberg News.

PSA would not give any new profit target until July 24 when it releases first-half earnings.

"The economic decline and foreign exchange movement are a big challenge for us. Meeting our targets will be very difficult this year," Folz told Bloomberg.