France's largest car maker PSA Peugeot Citroen announced on Tuesday a 16.5-percent decline in sales in 2012 worldwide as persistent deterioration of European market heavy-weighted the group's performance.

The group's global sales stood at 2.965 million units over the period, a result of "the crisis affecting the European automobile market" and "the decision to suspend sales of complete knock-downs CKD units in Iran as from February in compliance with international regulations," according to PSA.

Hard hit by economic troubles, demand fell by 13.3 percent in France, 14.9 percent in Spain and 20.9 percent in Italy.

However, outside the European bloc, the French group gained ground in Russia, China and Latin America where sales rose by 10.1 percent, 7.2 percent and 5.6 percent respectively.

"PSA Peugeot Citroen has felt the full force of the sustainable decline in Europe's automobile markets. This situation makes our international strategy more necessary than ever. We stepped up our global expansion in 2012 and will continue in 2013, with a growing presence in China, Latin America and Russia," said Frederic Saint-Geours, PSA Executive Vice-President Brands.

Expecting a difficult situation in Europe where sales set to decrease by up to 5 percent, the group confirmed its target of generating half of sales outside the continent in 2015.

Paralyzed by poor competitiveness and sluggish sales, PSA said it would cut 8,000 jobs in France as part of a restructuring plan to compensate for losses.

It recorded a 3.9-percent decrease in the third quarter revenue of 201 to 12.93 billion euros (16.89 billion U.S. dollars).