General Motors has sold its seven per cent share in PSA Peugeot Citroen.
The sale (comprising nearly 25 million shares) resulted in gross proceeds of €0.25 billion for GM, which undertook to buy into cash-strapped PSA in the short term while the French company was restructuring. It's a small but significant milestone along the way for the two firms, embarked on building three new products based on PSA platforms.
A new B-segment peoplemover will likely succeed the current Opel Meriva (pictured) and provide PSA with a competitor to the Ford B-Max, and a C-segment crossover SUV will presumably fill the vacuum left by the Peugeot 4007 (possibly the Peugeot 4008 and Citroen C4 AirCross too). Currently, PSA's SUVs are built by Mitsubishi. Both the new MPV and the SUV are to be based on PSA platforms.
In addition, the two companies will co-operate in the development of a B-segment light commercial vehicle based on another PSA platform. According to a press release from GM, the first models founded on these shared platforms will see the light of day in 2016.
Since the original announcement that the American Corporation – on behalf of Opel – would join forces with PSA, the two companies have chosen to terminate the joint venture to develop a common B segment platform and a small petrol engine to go with it. The B-segment MPV to take its place will be exclusively a PSA project.
At a high level, the alliance aims optimise purchasing and logistics, and will centre around European markets. 'Cross manufacturing' will result in PSA building one vehicle for GM/Opel, and Opel building one vehicle for PSA. This will allow the two companies to balance output more closely to demand. GM will build B-segment MPVs in the Opel plant at Zaragoza in Spain and PSA will build the C-segment crossover SUVs in the French plant at Sochaux.
“The Alliance between PSA and GM is based on a balanced approach,” said Karl-Thomas Neumann, GM executive vice president and president, Europe. “The vehicles of both manufacturers will be highly differentiated and fully consistent with their respective brand characteristics. The partners are now focused on execution of the Alliance while remaining open to new opportunities.”
GM and PSA expect to share in cost savings worth USD $1.2 billion by 2018. The alliance remains a work in progress, with GM, for example, waiving its right to terminate the agreement in the event that other interested parties take a stake in PSA.
“These announcements show that the Alliance continues to progress and is a key component of the Group’s turnaround plans in Europe,” said Philippe Varin, chairman of the board for PSA Peugeot Citroen.
The sale of the PSA stake has contributed to GM's bottom line, with the company announcing a US $3.8 billion net income from revenue of $155.4 billion for the calendar year 2013. While the revenue rose by over $3 billion, year on year, the net income actually declined from the figure of $4.9 billion in 2012. Even so, 2013 is a massive improvement for GM after the GFC-era Chapter 11 bankruptcy proceedings. Read the latest news and reviews on your mobile, iPhone or PDA at carsales' mobile site...
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