GM Cutting Back on PSA Partnership

PSA PeugeotPeugeotFrance, 1882 > present120 models
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-Citroën’sCitroënFrance, 1919 > present94 models
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poor Q3 financial results may scuttle its partnership with GMGMUnited States of America, 1998 > present8 models
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and force it into the ownership of Chinese automaker Dongfeng. PSA has €12.11 billion in revenue for the third quarter, a 5.8% decline compared to 12.58 billion in the period for 2012. Total sales in Q3 were down 2.5% from last year to 610,554 cars from both companies, not counting commercial vehicles.

GM says that as a result of the company’s poor performance, it has cancelled plans to develop a subcompact platform with PSA. Now, PSA will be responsible for developing its own platform for the next generation Peugeot 208Peugeot 208 Gen.1France, 2012 > present103 versions
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and Citroën C3Citroën C3 Gen.2France, 2009 > 2016111 versions
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. Under the original plan, that platform would have been shared with GM for the Opel CorsaOpel Corsa Gen.4 [D]Germany, 2006 > present222 versions
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and other international models.

"We have other projects under review. Some projects are not economically feasible, which is why they are dropped, but we're taking the projects one-by-one and examining their economic feasibility first,” said Jean-Baptiste Thomas, a PSA spokesperson.

Plans to build the next generation Opel MerivaOpel Meriva Gen.2Germany, 2010 > present48 versions
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and Citroën C4 PicassoCitroën C4 Picasso 2France, 2013 > present55 versions
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at a GM factory in Zaragoza, Spain, will continue, though, with production planned in late 2016.

"We are moving forward with the implementation" said Ulrich Weber, a GM spokesperson.

GM and PSA are still moving forward with new joint venture programs.

GM bought 7% of PSA in February 2012. It had originally planned to build five shared platforms and powertrains. In the last weeks, Dongfeng has emerged as a possible buyer of PSA. It would take a 20%-30% stake, enough to be the largest single stockholder. GM has a clause in its contract that it can back out of the deal if a large owner comes to PSA. 

Source: Automotive News Europe