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    General Motors and PSA Peugeot Citroen Slim Down Their Alliance

    William Maley

    Staff Writer - CheersandGears.com

    October 23, 2013

    The alliance between General Motors and PSA Peugeot Citroen was supposed to help out the two companies with number of new vehicles and powertrains, and lower costs. But since the alliance was announced last year, it has been fraught with disappointment. Now it appears the alliance is scaling back a bit.

    According to Automotive News, the two companies are slimming down the alliance as the two companies pursue other ways to reverse losses. Part of this slim down is due to the planned joint platform for subcompact cars was nixed. This platform was the heart of the alliance.

    "Further analysis showed that the business model just wasn't there," said a PSA spokesperson.

    But there a couple other items at play. For one, sources say PSA Peugeot Citroen is in talks with Chinese automaker Dongfeng about a new partnership. The automaker plans to increase capital by about 3 billion euros, with Dongfeng and the French state possibly each taking stakes of about 20 percent. Now GM could pull out of the alliance since Dongfeng is a competitor to SAIC, GM's partner in China.

    The other item is that GM has been taking its own path for recovery in Europe. GM's new Europe chief, Karl-Thomas Neumann has been making a number of changes. He has moved some of the production of the Opel Mokka from Korea to Spain and recently got GM's Russian operations under his control. GM is also stepping up their efforts of using their platforms globally.

    "It certainly seems GM has no focus on the alliance with Peugeot any more. They don't want to be partnered with a struggling company, and they have alternative methods to turn things around," said Kristina Church, analyst with Barclays.

    But the alliance isn't coming to a close. The two still have two vehicle projects which happen to be compact minivans and crossovers and a joint purchasing program.

    "We are moving forward with the implementation" of the projects which have already been agreed upon, said GM spokesman Ulrich Weber.

    Source: Automotive News (Subscription Required)

    William Maley is a staff writer for Cheers & Gears. He can be reached at william.maley@cheersandgears.com or you can follow him on twitter at @realmudmonster.

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    I see more problems than help with this alliance and GM should just kill it and walk away. No real gain and I doubt they will truly see any gains from the two auto lines they are supposedly working on or from the parts. PSA Peugeot Citroen is a dying entity and I think France would be stupid to prop it up. Let the Chinese be vultures and clean the bones.

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    GM is more than capable of going on their own. They need to hire me though to get their EU dealership network fixed.

    DONE! Your hired to clean up that Euro Mess of dealerships. Modernize and streamline it Auto Yoda! :P

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