Open

Coming up

Don't miss

Replay


LATEST SHOWS

MEDIAWATCH

No strategy and a beige suit

Read more

THE WORLD THIS WEEK

The World This Week - 29 August 2014 (part 2)

Read more

THE WORLD THIS WEEK

The World This Week - 29 August 2014

Read more

ENCORE!

Alain Choquette: A Hilarious Magician in Paris

Read more

FOCUS

France welcomes Iraqi Christian refugees

Read more

FRANCE IN FOCUS

Emmanuel Macron: A new economy minister with a pro-business agenda

Read more

THE OBSERVERS

More of this year's best Observers stories

Read more

#TECH 24

Changing the world, one video game at a time

Read more

IN THE PAPERS

Socialist Party summer conference kicks off in explosive atmosphere

Read more

  • Exclusive: Fabius warns of further sanctions against Russia

    Read more

  • Experimental Ebola drug ‘ZMapp’ heals all monkeys in study

    Read more

  • British killer escapes from French psychiatric hospital

    Read more

  • Ukraine to relaunch NATO membership bid

    Read more

  • Police hunt for British boy with brain tumour taken to France

    Read more

  • Chelsea’s Torres set for AC Milan switch

    Read more

  • France shines in IMF list of world’s promising economists

    Read more

  • Mapping Ukraine: Canada and Russia in ‘tweet for tat’ row

    Read more

  • First case of Ebola confirmed in Senegal

    Read more

  • Obama has 'no strategy yet' on potential Syria strikes

    Read more

  • Netflix to woo French with ‘House of Cards’ set in Marseille

    Read more

  • French businesses ‘hoping for a new Thatcher’

    Read more

  • Syrian refugees surpass 3 million, UN says

    Read more

  • West backs Ukrainian claims of Russian incursion

    Read more

  • Libyan PM resigns as Islamists set up rival administration

    Read more

  • UN says 43 peacekeepers captured in Golan Heights

    Read more

  • The deleted tweets of Manuel Valls

    Read more

  • Peru seizes record 6.5 tonnes of Europe-bound cocaine

    Read more

  • Pakistan army to mediate between PM, protesters

    Read more

  • In pictures: Billions of locusts invade Madagascan capital

    Read more

Business

Peugeot in talks with GM on 'strategic partnership'

Text by News Wires

Latest update : 2012-02-22

French auto maker PSA Peugeot Citroen is in talks with US automotive giant General Motors for a strategic partnerhip, French Labour Minister Xavier Bertrand said Wednesday. The two would jointly develop parts and engines in Europe.

AFP - Leading French carmaker PSA Peugeot Citroen is in talks with US giant and world number one General Motors on forming a "strategic partnership," French Labour Minister Xavier Bertrand said Wednesday.

The news sent Peugeot shares soaring almost 13 percent to 16.20 euros ($ 21.4) in early afternoon trade on the Paris stock exchange.

"The chairman of the group informed me last night about discussions for a strategic partnership and told me it was good news for the group", Bertrand told Europe 1 radio.

Bertrand said Peugeot chairman Philippe Varin had told him the deal would allow the French group to cut its production costs but he would not be drawn on whether the plan was for a full merger or a simple alliance.

The minister said the talks were broadly good news but that his government was seeking assurances French jobs were safe. President Nicolas Sarkozy is seeking re-election in nine weeks and Peugeot is a major French employer.

The French state helped bail-out both Peugeot Citroen and its rival Renault during the recession that followed the 2008 credit crunch but does not hold a stake in the group. It will nevertheless watch the talks closely.

"The government does not interfere in decisions taken by big private groups but obviously we're watching the situation at PSA closely because it concerns French industrial strategy and jobs," said Budget Minister Valerie Pecresse.

Peugeot confirmed overnight it was in talks with other carmakers, without identifying GM, and the business daily Les Echos said the two groups were planning to announce their alliance at the Geneva motor show next month.

"In the context of its globalisation strategy and improving its operational performance, PSA Peugeot Citroen looks at potential cooperations and alliances," the firm said in a press statement.

"Discussions are taking place and there can be no certainty at this stage that these discussions will result in any agreement," it said.

General Motors also refused to confirm the deal, saying simply: "GM regularly holds discussions with others in our sector but wishes to make no comment on this specific information."

Peugeot is France's top car manufacturer, ahead of Renault, and Europe's second, behind Volkswagen.

The Peugeot family controls 30.3 percent of the capital and 45.75 percent of voting rights in the firm which effectively took over French car manufacturer Citroen in 1976.

Last year, the firm, which employs 205,000 people worldwide, sold 3.5 million cars around the world, two-thirds of them in Europe where the market is under pressure as the economy slows sharply.

The Financial Times reported that the alliance would see Peugeot and GM's European subsidiary Opel Vauxhall jointly developing parts and engines in Europe for vehicles sold under their respective brands.

PSA revealed last month that it was open to the idea of an international alliance but rumours had earlier focused on a possible tie-up with the US and Italian group Fiat-Chrysler.

PSA's sales fell 1.5 percent last year and its net profit was cut in two, to 588 million euros ($777 million).

The group already has cooperation agreements with Germany's BMW to build petrol engines, with Italy's Fiat and Turkey's Tofas to build light trucks, and with US giant Ford for diesel engines.

It works with Japan's Mitusibishi to build SUVs and electric cars, with Toyota for small cars and with its historic French rival Renault to build motors and mechanical parts.

But the group has struggled to compete globally with industry mammoths like GM, Toyota and Volkswagen and auto alliances such as Renault-Nissan and Fiat-Chrysler.

Date created : 2012-02-22

  • AUTO INDUSTRY

    Peugeot Citroen recalls 97,000 cars after Toyota climbdown

    Read more

COMMENT(S)