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by Brett Davis

US auto giant General Motors is in talks with Peugeot-Citroen outfit PSA over a possible European alliance. French Labor Minister Xavier Bertrand revealed on radio that talks between the two had been initiated.

Discussions have centred around sharing parts and vehicles, according to reports, rather than major capital deals. It’s understood GM could assist PSA in expanding into China and Brazil and relying less on European sales, while PSA could assist GM in Europe where brands such as Opel are not doing too well.

A GM-PSA alliance could see vehicles, engines and other components being manufactured in Europe and shared between both companies, saving manufacturing costs.

Reports suggest Peugeot is looking to expand into other markets to reduce its reliance on Europe, where yearly sales dropped 8.8 per cent at the end of 2011. This could involve a return to the US, a market the French company hasn’t been part of since 1992.

General Motors on the other hand, is looking to build sales in Europe. Last year the European arm of the company reported a loss of $747 million due, in part, to dwindling Opel sales. With PSA being the second-largest manufacturer in Europe, GM could use a helping hand.

An announcement is expected to be made on an alliance deal at the 2012 Geneva motor show, which kicks off on March 6.

  • Steve2012

    Run Peugeot, run!!!!!

  • Tim

    Agree, lets not kill another Euro manufacturer (aka Opel and Saab)

    • DAVIDZ

      Errrrr OPEL would be the one it will cross-share parts with!

      Its actually what could possible SAVE OPEL, it has fiscal issues ATM

  • Sydlocal

    I wonder how this is going to effect Ford considering pretty much all of their passenger car diesel engines are from PSA….

    • schah7

      Very good point “Sydlocal” because THOSE diesel engines are a co-designed with PSA & Ford. Its a joint venture project which also gave Jag & Land/Ranger Rover access to those diesel engines when they were both owned by Ford.!

    • DAVIDZ

      NO, GM Europe are using FIAT Powertrain items, that is still from when they where “married”, this will continue on in the future

      • schah7

        “DAVIDZ”……. yeah Right.!?????????

      • Sydlocal

         What are you getting at Davidz? What has GM Europe using VM Motori/Fiat powertrains got to do with Ford using diesels from PSA?
        All I was saying is that considering Ford, one of GM’s main competitors, has spent a lot of money over the years co-developing diesel engines with PSA with all of Ford Europe’s diesel passenger car engines built by PSA, be effected with their major competitor taking over the company that makes their diesel passenger car engines? Will they (Ford that is) have to find another supplier (I would say yes)? Does some of the Ford technical developments/patents etc in the diesels come with the ownership of PSA? etc etc etc. This could have major implications for Ford Europe…

  • Daniel

    This reminds me of the Alfa Romeo/Chrysler alliance. Alfa Romeo, like Peugeot, still have a little way to go when it comes to build quality and reliability, but they both make great looking cars that get closer to the mark every generation. Chrysler and GM however both make long lists of dreadful, pointless, ugly badly built cars and ultimately, I can’t see that the European brands are really getting any advantage out of these deals.

  • Patsy

    DEAR GOD NO! DON’T DO IT PSA! Ask Daimler how their tryst with Chrysler worked out.

    • Hillyb

      Chrysler is not GM

      • Steve2012

        They’ve got one thing in common, bankruptcy!

      • somebody who knows nothing

        However if you look at history, GM has a wonderful track record when it comes to raping other companies..
        Saab was bought around the same time as Ford bought Volvo. Saab was left stagnant, not recieving a truly new vehicle till to late and all its Turbo, handling and other technologies were dragged across to GM products, Volvo were taken from square heavy boxes to desirable vehicles in the same period. Yes Ford took Safety technology but it was more than a fair swap..
        Suzuki is another classic example… GM-H decided the Swift based Barina was to old in the early 90’s and swapped over to the Opel Cadet, yet Suzuki was made to soldier on for another 10 years with that product. All of Suzuki’s products (except Kizashi) are well past their design use by date yet GM only took from them. Anyone Remember Geo in the states?
        Ford on the other hand has a far better track record, Read Jaguar & Mazda into that as well, both taken from stumbling basket cases to solid businesses now.

        What would GM get out of this partnership? Hydro-pneumatic Suspension, good small diesels, and access to a good range of lite commercials (like GM-H said they were going to get in the early 2000’s off Renault lol) 

      • Patsy

        Thanks, I am aware of this. I was drawing the parallel between a successful European and an American basket case joining forces. Didn’t work for the aforementioned. 

  • Dave S

    This is not a buy out, but an alliance. I see it working well.

    • somebody who knows nothing

      Suzuki, Fiat, Isuzu & Subaru all swore allegance to GM… All fell to great depths as the flood of product & technology went one way. Perhaps GM Mk2 may be different but knowing what has been carried over from Mk1 and what was left behind I would say there is more chance in Rob Oakshot being re-elected than GM changing….

  • Leighh

    and in a few years Obama  will need to bail out both companies instead of just GM……he should have let GM go the way of the Dodo…..