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General Motors and Peugeot form alliance to share parts, platforms and purchasing
FRANKFURT, Germany (AP) ' General Motors and France's PSA Peugeot Citroen said Wednesday that they're forming an alliance to share car platforms and purchasing power.
As part of the alliance, GM intends to take a 7 percent stake in the French automaker. Peugeot will raise $1 billion (euro0.74 billion)in new capital.
The two companies are seeking efficiencies that will make them more competitive in Europe's car market. GM's European business lost $700 million there last year and the company has said it's determined to turn it around.
The two companies said in a joint statement that they'll continue to sell their own vehicles independently and on a competitive basis. The deal will mean they can leverage a combined purchasing volume of $125 billion with suppliers.
"This partnership brings tremendous opportunity for our two companies," said Dan Akerson, GM chairman and CEO. "The alliance synergies in addition to our independent plans, position GM for long-term sustainable profitability in Europe."
Philippe Varin, chairman of the managing board of PSA Peugeot Citroen, said that the partnership was "rich in its development potential."
"With the strong support of our historical shareholder and the arrival of a new and prestigious shareholder, the whole group is mobilized to reap the full benefit of this agreement," he said.