PSA Group needs deeper cuts in China, CEO says

SHANGHAI, April 18 (Reuters) - PSA Group needs "a

new business model" in China with "much more cost reduction",

Chief Executive Carlos Tavares told reporters on Tuesday at the

Shanghai auto show.

The Paris-based maker of Peugeot, Citroen and DS cars will

have to find deeper cuts in purchasing, logistics and

manufacturing to offset declining vehicle prices, Tavares said.

PSA Group will need more SUVs in its lineup to compete in

the cutthroat Chinese market, Tavares also said, adding that an

existing 20 percent savings goal for China will be "hard to

achieve".

(Reporting by Joseph White; Writing by Laurence Frost, editing

by David Evans)