Autoblog

GM, PSA scrap large car program, move forward with small engine development

Jeffrey N. Ross — Sat, 22 Dec 2012 15:02:00 EST

Filed under: GM, Peugeot

The partnership between General Motors and PSA Peugeot-Citroën isn't expected to produce any results until 2016, but it has created plenty of news (and speculation) since it was formed back in February. Now, GM is laying out some of the specifics of the deal while Automotive News Europe is reporting plans have been scrapped to produce a shared platform for a midsize sedan.

In "definitive agreements" between the two automakers, GM says that three new vehicle platforms are still on track; one of these will bring a new compact minivan to GM's Opel and Vauxhall brands and a compact crossover to Peugeot, and the other platform will be for B-segment minivans for both entities to share. ANE says that the proposed shared platform for the Opel Insignia and Citroën was canceled due to the lack of a sound business case.

In addition to cars, the joint venture will also be an opportunity for both automakers to develop "high-performance, efficient" gasoline engines and to create joint purchasing to allow both companies to potentially save money (this aspect of the agreement is still pending legal clearance from anti-trust approvals).

GM's official statement is posted after the jump.

Continue reading GM, PSA scrap large car program, move forward with small engine development

GM, PSA scrap large car program, move forward with small engine development originally appeared on Autoblog on Sat, 22 Dec 2012 15:02:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

GM stake in Peugeot will cost $423 million

Dan Roth — Wed, 07 Mar 2012 14:21:00 EST

Filed under: Europe, Plants/Manufacturing, GM, Earnings/Financials, Peugeot, Citroën

General Motors wants to become the second-largest shareholder in PSA Peugeot Citroen, and the gears of a deal for seven percent of the French automaker are beginning to mesh. It cost General Motors $423 million to buy into PSA, and the companies will remain competitors despite lashing their rafts together.

Both automakers would like to net cost savings over the course of the initial 10-year term of the partnership by leveraging their collective purchasing power for better prices from suppliers and also sharing economies of scale. GM and PSA are also looking to create vehicles, powertrains and/or components together within the next four years. The two companies have already started work on developing a low-cost small car to sell in emerging markets, and GM is looking to hook up with Peugeot's Gefco logistics arm, as well.

Peugeot stock has been forced down in value by the company issuing new shares for General Motors to buy, facilitating the deal. Peugeot has also suspended paying a dividend this year to keep cash on hand, further upsetting shareholders and the market in general. Market watchers suspect that any cost savings may be slow in coming, and there's little detail of how GM and PSA intend to address both companies' overcapacity problem in Europe or how they intend to find compromises with the typically strong labor unions there, as well.

Still, the hopeful need only look to Renault-Nissan for an example of the potential upside. Of course, GM's deal with Fiat, which started in 2000 and ended with a $2 Billion payment in 2005, is a reminder of just one of the ways the bloom could fall off this rose.

GM stake in Peugeot will cost $423 million originally appeared on Autoblog on Wed, 07 Mar 2012 14:21:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

GM, Peugeot in "advanced alliance talks"

Jonathon Ramsey — Wed, 22 Feb 2012 09:56:00 EST

Filed under: Europe, GM, Renault, Opel, Citroën, UK

Automotive News is reporting that stories in two other papers, France's La Tribune and England's The Financial Times, assert that General Motors and PSA Peugeot Citroën are "in advanced talks about an alliance." Neither maker would comment on the stories, but it has been well documented that both are looking to turn around their European operations. Peugeot's parent announced 6,000 job cuts late last year and the immediate cessation of Le Mans racing this year. Opel lost hundreds of millions last year and took on a new CEO with a near-vertical climb ahead based on the prognosis for the European market.

If the talks are concluded in the way reports indicate, Opel/Vauxhall and Peugeot would cooperate on projects from developing engines and transmissions to complete models that each could sell. Peugeot already has partnerships with several other automakers, but none are as involved as this one could potentially be. It's understood that no shares in either company would change hands, but a partnership this intense would still require the approval of the Peugeot family.

We wonder if Opel/Vauxhall and Peugeot can do together what each can't seem to achieve alone. Sure, Opel could lower its development costs and with a joint model Peugeot could gain less expensive access to wider markets, but can the two different cultures create cars that would serve their respective brands? Suggestions are that talks are far enough along that an agreement, if achieved, could be announced at the Geneva Motor Show next month.

GM, Peugeot in "advanced alliance talks" originally appeared on Autoblog on Wed, 22 Feb 2012 09:56:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments