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GM sells stake in PSA

Future partners: GM and PSA will build three models as a part of a joint venture that will save the companies $US1.2 billion.

GM to sell its shares and scale back strategic alliance with PSA in Europe

13 Dec 2013

GENERAL Motors has reaffirmed its commitment to developing future models with PSA Peugeot Citroen, despite announcing today it will sell its seven per cent equity share in the French conglomerate.

GM purchased the stake in PSA in March 2012 as a part of a model-sharing deal designed to cut vehicle costs by $US2 billion ($A2.23b) over five years, but this has been revised down to $US1.2 billion ($A1.34b), to be distributed evenly between the two companies.

The deal originally stated that the car-makers would produce four different vehicles in the five-year period, but a joint statement confirmed that this has been scaled back to three models.

In the statement, GM and PSA said the alliance will continue to focus on joint programs such as “purchasing and logistics” as well as manufacturing.

The future product plan involves the development of two vehicles to be based on PSA platforms, including a B-segment MPV that could replace both the Citroen C3 Picasso and Opel Meriva that are predominantly sold in Europe and South America.

The second vehicle built on a PSA platform will be a C-segment “crossover-utility vehicle” which will fill a hole in the line-up of both French brands following the demise of the Mitsubishi Outlander-based Peugeot 4007 and Citroen C-Crosser SUVs.

A third model to be jointly developed is confirmed as a B-segment light-commercial vehicle that would likely become the next-generation replacement for the Opel Combo and the Peugeot Partner/Citroen Berlingo twins.

GM says each company will produce one model for the other and that the first vehicles from the alliance should surface in 2016.

The B-segment vehicles will be built at GM’s Zaragoza, Spain factory, while the crossovers will be manufactured in France at PSA’s Sochaux plant.

GM Europe executive vice president and president Karl-Thomas Neumann said the alliance between the two companies will continue into the future with models that will maintain the feel of each brand.

“The Alliance between PSA and GM is based on a balanced approach,” he said.

“The vehicles of both manufacturers will be highly differentiated and fully consistent with their respective brand characteristics.

“The partners are now focused on execution of the Alliance while remaining open to new opportunities.”

Both General Motors and PSA have struggled in Europe in recent years, thanks to the economic downturn in the region.

GM’s overall profits were down by 36 per cent last year compared to 2011, with Opel and Vauxhall alone losing $US1.8 billion for the year.

PSA struggled after failing to expand into emerging markets, although recent reports suggest the company is turning this around with an increase in sales in China, particularly for its Citroen brand.

The news that GM will sell its shares in PSA comes during a busy period for the US auto-maker, which announced earlier in the week that global product development chief Mary Barra would take over as CEO, following the retirement of Dan Akerson.

Just one day prior, the US government’s treasury department confirmed it had sold its final shares in GM following its bail-out via Chapter 11 bankruptcy in 2009.

GM announced last week it would dump its Chevrolet brand in Western and Eastern Europe in a bid to help grow its Opel and Vauxhall brands.

Finally, GM-Holden confirmed just days ago it would close its Australian manufacturing operation in 2017, closing a 65-year chapter on the local car industry.

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