Reports have it that General Motors and PSA/Peugeot-Citroen are in talks about a possible alliance. The news broke after PSA CEO Philippe Varin informed the French government – French Labor Minister Xavier Bertrand confirmed that Varin had told him about the talks between the two automakers earlier in the week.
Reuters reported that the two companies are discussing a broad manufacturing alliance, designed to stem losses in Europe and lower production costs in other markets, with a focus on sharing vehicles and parts rather than on a capital tie-up. PSA did however say in a statement that “there can be no certainty at this stage that these discussions will result in any agreement.”
It was also reported elsewhere that a tie-up would see the automakers jointly build cars and components in Europe. If the deal comes through, then PSA and GM’s Opel/Vauxhall unit are set to jointly develop engines, transmission systems and complete vehicles, which will then be sold under their respective brands.
Both companies are lagging behind in the European market – GM’s European business, including the Opel brand, was US$747 million in the red, before taxes and interest, with sales dropping by 1.9% to 1.17 million units. Meanwhile, PSA’s 2011 European sales volume went down by 8.8% to 1.68 million units.
If there’s a positive outcome to the discussions, an accord could well be announced at the Geneva show early next month, yet another report indicated.
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I just can’t see what any tie up would be of benefit to Opel/Vauxhall/Peugeot/Citroen since they all have models competing within EUR1k of each other and both are losing market share in their respective home country.
In addition, the PSA group are under political pressure NOT to start handing out redundancy notices to staff and you can bet your bottom dollar that the German unions won’t entertain any plant closures. Peugeot have so many partners these days,although arrangements with Fiat will end in 2014, so maybe GM is a potential partner to replace Fiat.
The real issue is that to try and keep market share, Peugeot were discounting certain models in Europe which in the end resulted in production costs exceeding showroom prices, that’s how they managed to burn through EUR 1 billion of cash flow in the last 6 months. GM’s problems in Europe are basically the same. For any tie up to work, one of them will have to undergo plant restructuring (aka closures) and perhaps both of them will have to drop models from certain markets.
The best opportunities for any tie up would be with light commercial vehicles perhaps?
platform and parts sharing will easily save them billions of dollars. by sharing R&D works, they could save half of development cost.
perhaps a collaboration between these two giants can come out with better FC cars for the mass market, parts charing could be a cost savings factor too. guess it is the volume game they wan to play…. however, EU car prices reflect the world actual pricing. that is n shud b the real scenario…. unlike here in bolehland, good quality cars r taxed so heavily that it is insane, totally unjustifiable
since when our gov tax vehicle based on quality? do you mean 3.0L Pajero and 3.0L BMW X6 will get different tax rate??? your fact is just ridiculous.
he was probably referring to build quality and specs offered here compared to europe.
Off topic: Hey Paul, pls post the picture of Lee Chong Wei’s White ferrari !