General Motors and PSA Peugeot Citroen are now set on scaling back their alliance, which could undermine a central pillar of the French carmaker’s recovery plan – the small car program.
Peugeot, which is pursuing an investment by Chinese partner Dongfeng as it struggles to stem losses, said the small car program at the heart of the GM partnership was likely to be cancelled.
“Further analysis showed that the business model just wasn’t there,” a Peugeot spokesman said, without elaborating.
In the early days of the alliance, Peugeot and GM unveiled plans for at least five vehicle and power train programs. But that was followed by unsuccessful talks on a deeper combination and a steady scaling back of plans.
Besides joint purchasing now underway, just two minivans have survived from “about forty” projects initially floated, according to Peugeot programs chief Jean-Christophe Quemard.
The dropped plan called for the replacement of the Peugeot 208, Citroen C3 and Opel Corsa with a common small car and was “absolutely key” to the partnership between the two companies – according to analysts.
While Peugeot may need the cash injection (from Dongfeng and the French government) to survive a collapse in demand from recession-hit Mediterranean markets, the unraveling of ties with GM threatens the longer-term recovery of its core European operations, analysts also say.
) - Thursday, October 24th, 2013 - filed under Citroen
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