GM and Peugeot may ramp up deal
GENERAL MOTORS and PSA Peugeot Citroen are exploring ways to combine European operations in a second phase of the carmaking alliance they forged to save costs this year, say sources.
It is understood the US and French carmakers have discussed combinations, including a joint venture between GM’s Opel division and Peugeot’s core manufacturing arm.
Discussions have covered “selling Opel to Peugeot, buying Peugeot’s automotive business or putting them all together in a new entity”, said one source.
Volume carmakers are bearing the brunt of a prolonged European car market slump.
Both carmakers declined to comment yesterday after French newspaper La Tribune reported that they were considering plans for a 50-50 venture into which GM would inject more cash.
Peugeot shares rose as much as 5.3 per cent on the report before giving up most of their gains to close 2.3 per cent higher at €6.19. GM was down 1.3 per cent in New York.
GM paid €320 million for a 7 per cent stake in Peugeot as part of the original alliance deal. – (Reuters)