French carmaker PSA Peugeot Citroen is to drive on its cost reduction plans, foreseeing a cut in headcount as likely.

Its chief executive Philippe Varin said it is committed to its 2010-2012 plan of achieving cost reductions of 3.7 billion euros , and the focus is now on addressing fixed costs.

This will entail a reduction in headcount, Varin said, but there are no plans currently to shut any French assembly plants.

Measures in the first half of this year brought savings of 308 million euros instead of the 550m euros planned, reports the Wall Street Journal.

Varin said PSA is sitting on 7 billion euros cash and has 4 billion euros in credit lines, so is in a stronger position than it was in the 2008 economic crisis.

Varin said Peugeot-Citroen is maintaining its outlook for the European automobile market to be around 1% below that of 2010, although order intake levels are holding up for now.