News that the General Motors alliance with Peugeot-Citroen of France has scaled back some cooperation plans means that this combination either has limited ambitions, or that the partners have differing visions of what can be achieved, according to Deutsche Bank.
It would also seem to finally shoot down more feverish rumors which emerged in October that GM, which has a seven per cent stake in Peugeot-Citroen, was thinking of merging its Opel-Vauxhall subsidiaries into the French company. The French newspaper La Tribune reported that GM would take a 30 per cent stake in a joint venture and inject up to $10 billion. At the time, this idea was ridiculed by those who said it made no sense to merge two companies which had already generated such horrendous losses. Opel-Vauxhall is expected to lose more than $1.5 billion this year, to add to the $16 billion it has eaten over the last 12 years. Peugeot-Citroen is likely to lose at least $1.9 billion in 2012.
GM and Peugeot-Citroen announced today that they had dropped plans for a fourth joint large vehicle program, but were broadening plans to work on a new generation of three-cylinder gasoline engines. Opel’s current large car is the Insignia, which sells in the U.S. as the Buick Regal. Peugeot’s larger sedan is the 508, and Citroen has the C5.
The joint vehicle programmes now include a compact SUV and Minivan, a small “multipurpose” vehicle, and a fuel efficient small car. A joint purchasing deal for Europe has been agreed, subject to anti-trust approval.
Deutsche Bank said the joint purchasing deal will not be global and will be limited to Europe. The bank said the proposed alliance looked less ambitious, or confused.
“Overall, this global strategic alliance looks very limited. And we wonder if each partner ever had the same vision on this alliance from day one,” the bank said in a report.