General Motors and PSA Peugeot Citroën are in talks to form an alliance to build cars in Europe. If the idea goes ahead it would result in the two companies jointly developing vehicles and then selling them under their own brands. This could be similar to the links between Renault-Nissan and Fiat-Chrysler, but the stories that have appeared in The Financial Times say that it would not be merger and that no equity would be involved. Both firms are struggling in Europe with strong competition and considerable over-capacity and both have recently announced significant losses for 2011. There is not much overlap at the moment with Peugeot factories in France and GM’s in Germany. While a full merger might make a little more sense the Peugeot company does not wish to be swallowed up by the industry giant. Nonetheless such a deal would have effects on the strategies of both companies in Europe, and in motorsport.
That makes me wonder about the fate of Opel.
…..if GM is to be judged by its treating of Saab since the early 90′s, I would be too!
G
Joint development without one owning the other… sound dubious. Subaru and Toyota did a thing similiar although Toyota bought 15% of Subaru’s shares.
Subaru did most of the engineering and then Toyota realised it looked like an idiot and started saying they did everything and basically it hasn’t ended well, but they have 2 very similiar cars, so that’s at least some kind of result.
I don’t like big companies merging it means less different cars. Here in Australia apart from the SUV’s and hatchbacks you either have a Ford (falcon), Holden (commodore) or Toyota Camry. All of which are bland and horrible non of which I would buy. And that’s because there isn’t really many companies competing, I fear that soon the world will just have a GM product, a Ford product and Japanese or two. And that means less choice and less interest and they are fighting over larger chunks rather than suiting niches. Oh well.
lets face it Vauxhall would be no great loss
Over twelve years ago it was thought by many of us in the industry that there were just too many car manufacturers competing in the developed world markets. Talking here of major mass producers not niche low volume specialists.
We expected that ultimately only six would remain. 2 US, 2 European and 2 Japanese. At the time, neither the rest of the far eastern market nor the Indian or Asean markets had reached significant numbers. But now all these, plus the south American markets have increased the world market, not to mention China. However together with the availability of these new markets we also have increasingly sophisticated new home grown manufacturers, some of whom are becoming world class (Korea in particular) and taking market share from the traditional European, US and even Japanese car producers.
If only the Japanese had not shown everyone how to do mass production properly!
I have to admit that 12 years ago we expected it to be Ford who disappeared from Europe, but recently it has looked likely to be GM, this may save someone, but there is still vast overcapacity some of it well out of date. There will be many further plant closures in Europe, it is just a matte of time.
Unfortunately the car industry supports many thousands of part, component and service suppliers who will also disappear, most of these operate on thin margins of profit and can easily be tipped into a terminal cash-flow situation by halts in car production. So we have to expect more mergers, declines and disappearances.
I can’t recall exactly who said it – Mr Honda or Mr Toyoda or similar – but a few years ago he was asked about the future of the car industry and he said there will be four car companies … plus Morgan!
Graham – Quite right ! it’d be no huge loss.
Volume is certainly an important factor in the competitive world of the automotive industry, but the main problem of overcapacity that PSA have is mirrored by GM Europe, so the up-side is limited. Peugeot’s automotive division made a $659 mio operating loss in H2, where GM Europe’s Q4 loss was $600 mio.
Being together will not make it any easier to reduce capacity in Europe. Talk is of a manufacturing alliance to share plants, vehicles and parts. It would help PSA in Latin America and Asia particularly, whilst GM would apparently benefit from PSA’s experience in small petrol engines and chassis. So the strategy would seem to be based on increasing profitability in strong markets to offset losses in Europe.
On top of that the two companies could cooperate together in the future on a new commercial van (GM and Renault no longer working together on the Traffic/Vivaro, PSA needing a new partner to replace Severlnord).
Look what happened before the financial crunch, GM was huge and swallowed up car companies, there was not enough money to go round and all of GM’s products started to fail, a bail out, ditching saab and sold off vauxhall.They have not learned nothing, GM got the biggest bailout in america and has the cheek to try and merge with psa peugeot and citroen and you swear that the credit crunch did not happen to them….I really feel sorry for the needy americans who are losing thier homes, where is the bail out for them….anyway time to get off my high horse…the word ”G..M.”.. stinks.
Up until this week, Vauxhall were still part of GM and the Vauxhall/Renault van operation at Luton is still churning out Vauxhall, Nissan, Renault and Opel vans to the best of my knowledge.
no way would the french government allow GM to swallow up PSA
french champions is the strategy irrespective of cost
I suppose Government Motors could teach Citroen how to make a car that really sucks..
Citroen have made some of the most sophisticated cars many years ahead of their time, I have a Xantia and would have another if they were still made but would prefer a DS Pallas.
Can’t help thinking of “Mon Oncle” here, (Schoolboys playing with the traffic, wonderful Jaques Tati) but anyway it had turning headlights, (which have been discovered again recently) air brakes hydro-pneumatic suspension (as does the Xantia) proper seats.
So no, it is GM that needs to learn from PSA!
(Until you reach your 60s, PSA only refers to cars, but now it’s become medical!)
An earthquake? On the anniversary of the christchurch earthquake too!
Is vauxhall now owned by holden by any chance ?
Holden owns nothing, Vauxhall, Opel, Daewoo they are all divisions of Government Motors..
why did i read that g.m sold vauxhall to holden? any answer joe?