PSA Peugeot Citroën on Tuesday sounded the alarm over consequences for carmakers if governments abandoned the car-scrapping schemes that have buoyed sales, with a warning that its losses this year could hit €2bn ($2.8bn).

Three weeks after Philippe Varin took the post of chief executive of Europe’s second-largest carmaker, the group warned that production in the fourth quarter could be scaled back again if government-supported programmes ended this year.