General Motors Revises Alliance With Peugeot-Citroen

GM and PSA cancel plans for a small car platform and three-cylinder engines.

Remember when General Motors and Peugeot-Citroen (PSA) entered in an alliance in 2012? Ever since then, various parts of the alliance have fallen by the wayside, such as the plans to develop a large car together. In the latest update to the alliance, the two companies announced today that they would not be collaborating on B-segment subcompact platform and an associated small, three-cylinder gasoline engine based on an existing PSA design.

The original plan called for this subcompact platform to be used for small, “low-CO2” GM and PSA vehicles for both GM and PSA vehicles in Europe and elsewhere. The engines for these vehicles were also intended to be cooperatively developed, and were expected to arrive by 2019. This plan has now been scrapped, likely because of financial factors and both companies’ recent struggles in the tough European market.

GM and PSA are still going forward on other collaborative aspects of the alliance, including C- and B-segment vehicles developed in cooperation by the two companies on PSA platforms. The larger, C-segment platform will likely be a compact crossover, and the B-segment will be a subcompact, MPV-like multipurpose vehicle. Additionally, the updated version of the alliance adds a subcompact light commercial vehicle to the list of cooperative models, which would most likely be a compact van for the European market.

The first of these vehicles is set to launch in 2016, and GM says the two companies will be highly differentiated to fit with different GM and PSA brands. Both GM and PSA will produce one vehicle for the other company, with the subcompact MPV being produced for both companies at GM’s plant in Zaragoza, Spain, and the compact crossover being built in PSA’s plant in Sochaux, France.

This updated alliance means that GM and PSA have revised the amount of financial savings they expect to gain from this partnership, as GM is now saying it expects the total amount of savings to be $1.2 billion by 2018, down from $2 billion in expected savings before. This amount will be shared “about even between the two companies,” according to GM’s statement.