In March of this year, General Motors and France’s PSA Peugeot Citroen Group, two companies faced with overcapacity issues in Europe, surprised the automotive world by forming a strategic alliance, with GM even buying a 7 percent stake in the struggling French automaker.

In October, they provided an update on their alliance deal, revealing plans for the shared development of four new model lines and joint purchasing moves.

In recent weeks there has been speculation that the deal was already in trouble, but GM and PSA have now released a joint statement providing further details on their complex dealings.

According to the latest statement, GM and PSA have dropped plans to co-develop replacements for their respective Opel Insignia and Citroen C5 models.

They will still work together on a compact MPV for Opel and crossover derivative for Peugeot, a small MPV for Opel and Citroen and an upgrade of an existing small car platform for the next-generation of small cars from Opel, Peugeot and Citroen.

The first vehicles resulting from the cooperation are expected to be launched in 2016. Both companies are keen to stress that the individual models will be highly differentiated and fully consistent with their respective brand characteristics.

Another significant area of the alliance deal is the development of small gasoline engines. The new engines will be derived from PSA’s current EB engine range, which features three-cylinder units ranging from 1.0 to 1.2 liters in displacement.

Finally, both companies will continue to focus on expansion outside of Europe, with particular focus being placed on Latin America.

Further programs are being investigated, which means we could be hearing of new deals in the future.