General Motors will sell its entire seven per cent stake in PSA Peugeot Citroen and scale back its collaborative efforts with the French car maker.
GM vice chairman Steve Girsky says the US-based manufacturer plans to sell the 24,839,429 shares – which it acquired for approximately US$400 million ($446 million) when it entered the strategic alliance with PSA in March 2012 – through a private placement to institutional investors.
“Our equity stake was planned to support PSA in their efforts to raise capital at the time of the creation of the GM and PSA alliance, and that support is no longer needed,” Girsky said.
“The alliance remains strong with our focus on joint vehicle programs, cross manufacturing, purchasing, and logistics. We're making good progress while remaining open to new opportunities.”
The duo confirmed it would not go ahead with the co-development of a new city car platform or three-cylinder petrol engine as originally planned, but would forge ahead with plans to collaborate on a pair of new compact SUVs, two small MPVs, and a new generation of city-sized light commercial vehicles.
The SUVs will be built at PSA’s plant in Sochaux, France, while GM will produce the MPVs at its Espana plant in Zaragoza, Spain. The first vehicles from the alliance are expected to launch in 2016.
The partners have also scaled back the savings anticipated through the joint venture, estimating synergies of approximately US$1.2 billion ($1.3 billion) by 2018, down from the initial estimate of US$2 billion ($2.2 billion). The savings are expected to be shared evenly between the two companies.