An initial alliance between the two automotive giants was sealed in February this year when GM took a 7% stake in Peugeot Citroën. The two companies hope this alliance will help deliver annual cost savings of $2bn by 2017 through joint procurement, vehicle development and logistics.
It has been a tough year in Europe for both companies, analysts have reported. Peugeot Citroën has estimated that the European car market contracted by 9% this year, the sixth consecutive year that it has done so, while GM European operations is expecting to make a loss between $1.5bn and $1.8bn this year.
Now the two companies have announced that they will be deepening their links through the development of a new three-cylinder gasoline engine, according to reports in the Wall Street Journal, and are also exploring product and industrial opportunities in Latin America and other fast growing markets.
Speaking to the Wall Street Journal, GM Europe President Stephen Girsky said: “We’ve made important progress in our alliance with PSA that will strengthen the partnership.
“Both partners have the possibility of realising projects they wouldn’t have been able to see through alone.”
