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GM Sells Stake In PSA Peugeot Citroën, Gives Update On Alliance

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GM and PSA Peugeot Citroen alliance

GM and PSA Peugeot Citroen alliance

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Despite its significant restructuring moves of the past week, General Motors remains committed to its alliance with France’s PSA Peugeot Citroën and plans to expand somewhat on the original deal. The alliance primarily concerns models destined to be sold outside the U.S., though some shared technologies may make it into vehicles sold locally.

In a statement, General Motors Company [NYSE:GM] and PSA confirmed continued cooperation for a handful of products based on existing PSA platforms, a pair of subcompact MPVs and a pair of compact crossovers. Additionally, the two firms will cooperate on new products in the subcompact commercial market, based on a new PSA platform. The first vehicles from the alliance deal are expected to launch from 2016.

Though the upcoming vehicles will share many components and perhaps even some styling, they are expected to be differentiated enough to warrant them as standalone products, or at least that’s what the architects of the new alliance deal tells us.

“The alliance between PSA and GM is based on a balanced approach,” GM Europe boss Karl-Thomas Neumann said in a statement. “The vehicles of both manufacturers will be highly differentiated and fully consistent with their respective brand characteristics.”

But it’s not just about developing new models together. The two will also share manufacturing-- with each firm producing one vehicle for the other. As previously announced, subcompact MPVs for both firms will be built at a GM plant in Zaragoza, Spain, while the new compact crossovers for both firms will be built at a PSA plant in Sochaux, France.

Another significant area of the alliance is shared purchasing, which should help both firms reduce costs.

Not all of the original plans devised by GM and PSA remain intact, however. The two firms have canceled plans to develop a new family of three-cylinder engines together. They have also canceled plans to develop a new subcompact platform together, and GM said it sold its 7 percent stake in PSA for $250 million.

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