General Motors and PSA Peugeot Citroen to form an alliance

One of our reliable sources informed us that General Motors and PSA Peugeot Citroen are planning to get into an alliance to combat the fast declining car sales of both the manufacturers. This alliance should include working on development of new drivetrains and new vehicles. It may be noted that US based GM, arguably the world’s largest carmaker, wishes to do something about its Opel/Vauxhall brand which has not made much of a profit since quite some time. The European car maker Peugeot too saw a considerable decline in sales at some of the regions and wishes to use GM’s well set network and other resources to fuel its growth.

A partnership with GM would make sense, because Peugeot and Opel both lack scale,” said Sascha Gommel, a Frankfurt- based Commerzbank analyst with a “hold” rating on Peugeot shares.

We routinely talk with others in the industry but have no comment beyond that,” Klaus-Peter Martin, a GM spokesman, said today. Peugeot spokesman Jonathan Goodman said that it was in talks on possible partnerships but did not reveal the name of the potential partner.

This possibility of an alliance is not being discussed by many as none of the automakers have made any of this news public yet.

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