GM Plans to Deepen Alliance With Peugeot image

GM-PSA Peugeot Citroen alliance remains strong, despite Peugeot’s struggle in Europe.

In March GM and PSA Peugeot Citroen surprised everyone by forming an alliance after the US automaker bought 7% of the French company’s stock. The agreement is based on two main pillars: the first one is to jointly buy components, commodities and other goods necessary to manufacture cars, and second one is to share components, modules and vehicle platforms.

Analysts expected Peugeot’s tensioned situation in the crisis stricken Europe to affect the alliance, but GM not only remained committed to the original deal, but also said this alliance might deepen. Sources said that GM tries to merge Opel with Peugeot’s manufacturing operations, which might take place in one of these situations: GM buys Peugeot’s automotive business, GM sells Opel to Peugeot or Opel and Peugeot will be merged into a new JV. The most likely to happen is the last one, as GM tries to eliminate Opel from its financial statements.

This alliance also includes sharing the platforms, and as the two companies announced earlier this year they plan to focus mainly on crossovers, mid-size passenger cars and MPVs. The first vehicle built on a common platform is to be launched in 2016.