UPDATE 6-Peugeot aims to hike margin in weak markets

(Adds details, profit margin comparisons)

By Marcel Michelson

PARIS, Feb 13 (Reuters) - Peugeot Citroen reported a more than fourfold rise in 2007 net profit on Wednesday and a better operating margin as its C4 Picasso and other new cars as well as cost cuts kept it on course for a 2010 margin target.

PSA (PEUP.PA: Quote, Profile, Research), Europe's second-biggest carmaker after Volkswagen (VOWG.DE: Quote, Profile, Research), said its operating margin -- a key benchmark in a sector struggling with weak growth in main European markets and high raw materials costs -- rose to 2.9 percent from a record annual low of 2.0 percent in 2006.

It set a 2008 target of 3.5 percent.

Italy's Fiat (FIA.MI: Quote, Profile, Research) had a 2007 margin of 5.4 percent and Germany's premium carmaker BMW (BMWG.DE: Quote, Profile, Research) has a margin of 6 percent and a 2012 target of 8-10 percent.

PSA's 2007 recurring operating income was 1.75 billion euros ($2.55 billion) up from 1.12 billion in 2006 and compared with analysts' average forecast of 1.48 billion. Net income was 885 million, up from 183 million and against a forecast 910 million.

The share price jumped 5.7 percent to 50.35 euros at 1446 GMT, while the DJ Stoxx European auto index was up 1.9 percent. The stock had fallen around 8 percent so far this year.

PSA, the world's sixth-largest carmaker in terms of vehicle production and eighth in sales, will launch 20 models in 2008, including five for China and five for South America as part of plans for 53 model launches in the 2007-10 period.