GM, Peugeot-Citroen in Talks for Possible Alliance

GM, Peugeot-Citroen in Talks for Possible Alliance
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We’ve already got the Renault/Nissan Alliance, so why not a General Motors/ PSA Peugeot-Citroen one? Well according to PSA Chief Executive Philippe Varin that might just be a possibility, at least from a manufacturing standpoint.

Varin says that PSA is currently in talks with General Motors, discussing the possibility of GM teaming up with the French automaker to help stem the latter’s stagnant sales in Europe (on which it heavily relies) as well as helping reduce manufacturing costs.

The idea is to see both automakers develop and manufacture cars and powertrains through a joint effort in Europe, though each manufacturer would retain its separate branding, marketing and distribution network.

This is seen as adding benefits to both PSA and Opel, GM’s  European arm which, like Peugeot, is currently struggling to compete against giants like Volkswagen and Renault, thanks to high labor costs and limited manufacturing capacity.

The venture will also give Peugeot improved access to overseas markets such as China and South America; it could possibly even witness a return of the brand to the US for the first time since 1992.

However, any joint venture between the two companies will have to receive the blessing of the Peugeot family, which still controls some 30 percent of PSA stock. In addition with failed merger talks between Peugeot and Mitsubishi still relatively fresh on some minds, Varin is understandably cautious about any future alliances, though with European sales dropping by 8.8 percent last year and Peugeot stock halving in value over the last 12 months, any joint venture would certainly be welcome news.

In the meantime while discussions take place, Peugeot is doing what it can to weather the current economic storm, Varin having recently announced that the company will be selling some 1.5 billion euros ($1.98 billion) in assets to help alleviate debt, which currently stands at around 3.4 billion euros ($4.5 billion).

[Source: Auto News]