GM and Peugeot enters into a joint venture

Friday 02 March 2012, 12:23 PM by

PSA Peugeot Citroen, the French car maker, and General Motors, the American multinational corporation, have officially declared to form an alliance. The collaboration between these two companies will share resources that are required for the production of automotive. This deal will include sharing of vehicle platforms, components and modules. As per the tie-up, both automobile companies will be jointly selling commodities, components and other types of services and goods. Along with this, GM and Peugeot will also continue to sell their cars individually in the market on a competitive basis.

During the initial stage, both of them aim to share the manufacturing platform and will likely concentrate on small cars, mid size passengers cars, Multi Purpose Vehicle (MPV) and crossovers. Moreover, the companies have also planned to develop a new brand with standard platform to manufacture automotive with low CO2 emissions. However, the first vehicle produced on this platform is expected to be rolled out in 2016.

Further, as a part of this collaboration, General Motors is also planning to acquire an impressive stake of seven per cent in PSA Peugeot Citroen. With this stake, GM will emerge as the second largest shareholder in PSA Peugeot Family Group. However, with these shares of GM, the company will not have any authority to intervene in the functioning of Peugeot. The stake acquired by GM is basically a part of sale proffered by PSA Peugeot Citroen.

Besides this, the joint venture between these two companies will look out for new areas, such as integrated logistics and transportation, for further co-operation. With this alliance, GM and Peugeot have speculated to reap $2 billion per year over the period of five years of joint saving.

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