GM and Peugeot-Citroen Scale Back Alliance

By | October 24, 2013
Back in 2012 General Motors bought up seven percent of PSA Peugeot Citroen as a sign of good faith when forming an alliance to share vehicle platforms, supplies, and cooperation between the two companies. Now it seems the partnership is falling apart, as plans for a new subcompact vehicle platform is likely to be canceled. Although the alliance was supposed to bring success to both of the companies during their time of struggle, a PSA spokesman told Automotive News that "Further analysis showed that the business model just wasn't there." The key holding the partnership in place was a plan to replace the Peugeot 208, Citroen C3, and GM's Opel Corsa with a common compact car, and as that is no longer an option, it makes it seem as if "GM has no focus on the alliance with Peugeot any more. They don't want to be partnered with a struggling company, and they have alternative methods to turn things around," said Kristina Church, Barclays analyst to Automotive News. Even if the small car platform is up in the air, the alliance has brought about other projects that have been agreed upon and are waiting on implementation. Joint purchasing and two vehicle programs have emerged from the union, including a compact minivan and crossover design. Over 40 projects were suggested, but only these two managed to find some footing. GM may be on a new course and thinking about ending the partnership with PSA, but it has recommitted to its European turnaround as an independent company. After hiring Karl-Thomas Neumann, former VW executive, GM has transferred its Opel Mokka production from Korea to Spain, and brought Russian operations under his considerations. Source: Automotive News (Subscription Required)