The two companies announced an alliance back in February 2012, aimed at restoring profit to their respective European sales, which have been hit severely hit in the wake of the global economic crisis that has seen consumer demand for cars slump.
At a joint press conference between Peugeot CEO Philippe Varin and GM Europe interim President Stephen J. Girsky in Brussels, the press were told that the auto giants hope that the purchasing alliance will yield $2bn in savings.
There is also an expectation of sales improvements over the five-year period that the alliance is expected to last. It will include joint purchasing of chassis and major parts for the compact models as well as a parts-procurement venture in the region.
In the first half of 2012, Peugeot lost $1.09bn while GM’s European division has lost $17.3bn since 1999. As a result of these loses Peugeot announced that it would be closing one of its car-plants in France by 2014 and reducing its workforce by 17%, while GM, owner of European car brands Opel and Vauxhall, said it would be closing a factory in Germany two years before it had originally planned to.
Following this latest announcement, Peugeot will lead work on a three vehicle platform that both manufacturers will use for a range of compact cars they plan to put on sale in 2016.
