GM to develop two passenger cars with PSA image

According to GM Chief Executive Dan Akerson, PSA Peugeot Citroën SA and GM may develop at least two passenger cars by this fall.

The new vehicles are likely to go on sale by 2016 in global markets, CEO Akerson said. Most probably, the first car to be launched would be a super-minicar for the South American market, where General Motors and PSA are looking to turn around their operations, the Wall Street Journal reported.

We wouldn’t be too surprised if this car is also made available globally as the demand for an inexpensive and frugal car exists across many countries in the world.

Joint development could help reduce costs of making a car quite significantly and this is said to be the major reason for General Motors and Peugeot entering into a tie up.

GM and PSA expect the pact to save about $2 billion annually when fully implemented in five years.
According to the joint statement, the arrangement will focus on platform sharing (basic vehicle engineering), components and modules.
To facilitate this, the automakers will create a global purchasing joint venture to increase volume and supplier leverage.

However, some analysts, including Max Warburton at Sanford C. Bernstein in London, are skeptical that the alliance will make much difference in the companies’ outlooks.

“Two wrongs don’t make a right,” he said.

“PSA and Opel can’t restructure independently. We see no reason why putting PSA and Opel together would speed up the process of plant closures, as both have excess capacity.”