Report – Peugeot wants to use GM alliance to gain entry in South America image

French carmaker PSA Peugeot Citroen formed with GM an alliance 18 months ago, to cut down costs and share ideas and products in Europe. Now, the former are keen on extending this partnership, as they want to take advantage of GM’s strength in South America.

Peugeot brand head Maxime Picat told the Financial Times: “They have already good scale there . . . In that market where the competition is very high, to join our forces is a good opportunity,” “There is no limit [to the alliance].”

The executive ruled out working with GM in the Indian market, where the U.S. carmaker has two factories: “We have decided to focus on China … South America and Russia,” the Financial Times quoted Picat as saying. “These are clearly our key targets outside Europe.”

Shifting its target markets away from developed countries is crucial for Peugeot’s future. Fellow strugglers such as Fiat and Renault have relied heavily on sales from outside of the continent to offset the impact of the worst European market slump for two decades.

Mr Picat expects European car sales to recover slightly in the second half of the year to end 5 per cent lower than in 2012, and reiterated the company’s expectation that it will outperform its target of halving its cash burn in half this year to €1.5bn.

Via Reuters, Financial Times