Despite the rebound, the carmaker missed its profit forecast. According to PSA Peugeot Citroen's 2006 interim report released in July, the venture aimed to earn 100 million euros in operating profit for the full year.

Liu Qixin, a spokesman from the venture, said yesterday that the company expects even higher profits in 2007.

It announced last month that it expects to sell 260,000 vehicles and slash costs by an additional 1 billion yuan this year.

"It could perform better in sales and financial results in coming years by launching new products," said Zhao Shengli, an auto industry analyst with Galaxy Securities Co Ltd

The venture will introduce three new models this year as part of its plan to roll out at least eight new products by 2009.

It currently makes the Citroen models Fukang, Elysee, Picasso, Xsara, C2 and C-Triomphe as well as the Peugeot 307 and 206.

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