General Motors Company (NYSE:GM) and PSA Peugeot Citroen scrapped ideas for a joint mid-size car program, putting an end to the possibility for vehicle sharing within their budding association while adding engine cooperation.
The automakers held in a statement that they had signed stable pacts on three out of four earlier declared vehicles, to syndicate their future small car programs as well as spacious minivans and two sizes of crossovers – which combine features of sport utility vehicles (SUV) and passenger cars.
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Plans to share future replacements for larger models such as the Citroen C5 and GM’s Opel Insignia were shelved after the companies failed to reach a “convincing business case”, a Peugeot spokesman said. But with compulsory agreements on three other vehicle platforms and fresh strategies to group a future generation of small gasoline engines, “the alliance is taking form and moving up a gear,” the spokesman added. The shared three-cylinder engines, intended to conform with Euro VII emissions standards entering force around 2019, will bring big funds for both partners, Peugeot said, without providing any further details.
The GM-Peugeot cooperation plan, declared in February, has made investor skeptic as the French automaker is weakening financially, resulting in thousands of job cuts under keen monitoring by socialist President Francois Hollande’s government
Detroit based General Motors, earlier this year, took 7 percent stake of Peugeot SA (PINK:PEUGY) (EPA:UG) in a capital increase by Europe’s Second-biggest automakeras, burning nearly 200 million euros ($265 million) a month. General Motors Company (NYSE:GM) is also having a hard time overcoming losses in the down and highly competitive European market.
General Motors Company (NYSE:GM) and Peugeot SA (PINK:PEUGY) (EPA:UG) have got a year-end time limit to stretch firm agreements on projected joint programs or end them to follow their own projects. Both carmakers are supposed to give an update next month on their corporation plans, along with $2 billion in estimated annual savings both companies flaunted when the alliance was disclosed for the first time. Since then, both partners have put aside joint plans to develop a small car for Latin America, a dual-clutch gearbox and now the probable mid-sized car program.
The possibilities of cooperation continue to remain outside Europe, General Motors Company (NYSE:GM) and Peugeot SA (PINK:PEUGY) (EPA:UG) said on Thursday, pledging further “exploration of product and industrial initiatives in Latin America or other growth markets”.
Talks on an increased tie-up were given a break last month as Peugeot’s crisis got worse, sources with information of the matter have said.