GM and Peugeot Postpone Building Cars in Brazil image

GM announced its plans to manufacture cars with Peugeot in Brazil will be postponed.

“So far the entire focus of the alliance has been Europe and I expect that to continue for some time, ” said South America chief Jaime Ardila.

In September GM and PSA Peugeot Citroen were announcing their plans to manufacture small vehicles in Brazil, begins with two new models for each of the allied automakers. Jaime Ardila said that GM plans to introduce the Cadillac brand into the South American market and that the automaker aims at selling 1.5 million vehicles by 2015 in the region. The two companies haven’t decided yet on a production site.

The alliance between GM and Peugeot was announced in February, when the US automaker took a 7% stake in Peugeot. According to the agreement the two companies plan to save $2 billion annually, five years from logistics, purchasing and joint developing new technologies and vehicles. GM said that the South American market is profitable for the automaker this year, while it is ‘cautiously optimistic’ about auto demand in China. The two automakers are expected later this month to make announcements regarding their purchasing agreement as a way to cut costs.