The Peugeot HR1 battery car concept. Peugeot itself now needs a charge-up.
General Motors is scaling back its once-promising alliance with French automaker PSA Peugeot Citroen – though it says it will move ahead with the partnership in a bid to trim the losses of its own struggling European operations.
The announcement comes barely a week after GM said it would pull its Chevrolet brand out of the European market to put more emphasis on reviving its German-based Opel division. There had been growing questions about whether GM and Peugeot would continue the partnership they once said could save about $2 billion in shared costs by 2018.
Moving ahead, noted a GM release, the program will continue to focus on the “main pillars (of) purchasing and logistics, focused on Europe, and extends into cross manufacturing.” But the partners will reduce the number of products they will jointly develop, going forward each now intending to produce one vehicle for the other by 2016.
A crossover they have co-developed will be built at a Peugeot plant in France, while GM’s plant in Zaragosa, Spain will assemble a new multi-purposes vehicle, or MPV, that will also be sold by Peugeot. They now have pulled the plug on development of both a B-segment vehicle and an engine it would use.
“The Alliance between PSA and GM is based on a balanced approach. The vehicles of both manufacturers will be highly differentiated and fully consistent with their respective brand characteristics,” said Karl-Thomas Neumann, GM executive vice president and president, Europe. “The partners are now focused on execution of the Alliance while remaining open to new opportunities.”
(GM pulling Chevrolet out of Europe. Click Here for the story.)
The alliance between the two makers has been troubled almost from the start. GM has already had to write down a major portion of the 7% stake it took in Peugeot due to the French automaker’s financial problems. The Paris-based company has had to rely on financial help from the French government to avoid collapse. And it is discussing a sale of equity to its Chinese partner, Dongfeng.
GM has been distracted by some of its own problems in Europe, however, and the maker’s latest turnaround plan has seen it shift directions in a number of key areas. This month’s decision to drop Chevy from Europe and focus on Opel is just a part of the U.S. maker’s efforts to stem deep losses that began before the new millennium. It is also planning to close a plant in Germany, a rare step on a continent with strict regulations on job cuts.
The partners still hope to trim shared costs by as much as $1.2 billion by 2018 despite the cuts in their alliance.
(GM shuttering its Australian manufacturing operations. Click Here for the details.)