Reuters reports that the founding family of PSA Peugeot Citroen has offered to give control of the alliance to GM as part of a plan that would see the companies' current relationship expanded even further.
Sources with knowledge of the talks told Reuters that the future deal with GM would likely result in Peugeot being combined with the US car marker’s European arm, Opel.
"GM faces the same overcapacity situation with Opel, and that's why PSA is trying to convince them to merge the two," the unnamed source said.
"The Peugeot family has now accepted that they'll lose control, so this is no longer an issue."
Such a move would be expected to come with political pressure given the likelihood of associated job losses and plant closures across both France and Germany.
For Peugeot the move is seen as a way of ensuring the French manufacturer’s production future as it feels the effects of the European car sales slump that has already resulted in job losses, plant closures, and the selling of assets.
In April, Peugeot head of communications Xavier Crespin admitted to CarAdvice that the company had no alternative but to view the GM alliance as a necessity for survival saying, “If you want to be considering protecting PSA you have to accept the alliance”.
While GM acquired a seven per cent stake in PSA Peugeot Citroen in March 2012, the Peugeot family, which founded the French brand in 1810 as a manufacturer of coffee mills and bicycles, holds a 25.4 per cent stake in the company.