The Peugeot Citroën group has made it known that some aspects of the alliance with General Motors will have to be revised downwards and has warned that the partnership may not be able to save the 2 billion dollars initially envisaged.
"The project to develop a common platform for the B-segment (small cars) is currently under review," the French said in a statement.
That doesn't mean the two automakers will stop working together. "The two partners are considering new initiatives," said Jean-Baptiste de Chatillon, head of Peugeot's finance office. GM also confirmed that the collaboration will continue on some projects, including two new cars.
The original agreement, signed in early 2012, provided for annual savings of $2 billion over the medium term, split equally between Peugeot and GM.
Both groups are looking to reduce costs in Europe and join forces on the logistics front, but there are no signs of a significant improvement in the market in the medium term. Plants are underutilized and fixed costs need to be cut. Peugeot and GM-controlled Opel are laying off thousands of workers and reducing production capacity, each closing one plant.
As part of the deal with the French, GM bought 7% of Peugeot to give the automaker finances a boost.
The two companies have already taken some steps, such as announcing the first jointly produced vehicle: it will be built at the GM plant in Zaragoza, Spain, and will be based on a platform developed by Peugeot.
Many wonder if the easing of the agreement with GM is an effect of the negotiations between Peugeot and the Chinese partner Dongfeng. Jean-Baptiste de Chatillon, when questioned on the matter, specified: “Everything we do with Dongfeng concerns China and exports to Asia. And it has nothing to do with what we do with GM in Europe”.
