Ford and PSA Peugeot Citroen's diesel joint venture has built over 20m engines in two families (1.4-litre to 1.6-litre, and two-litre and above) over the past 12 years but the automakers will now go their separate ways on the larger category.

The two automakers said they had decided to independently develop and manufacture their larger diesel engines (two-litre and above) to meet their future needs as well as new regulations.

The decision has no impact on current production of existing jointly-developed engines or the derivatives planned for Euro 6 emissions legislation which comes into effect from 2014.

The decision initially affects only commercial vehicles introduced from mid-decade.

PSA and General Motors recently announced a partnership to share parts and purchasing and said they would cooperate on B and D segment cars as well as a crossover and minivan. They are also expected to expand the agreement to cover a small car for emerging markets as well as larger vehicles and transmissions.

Peugeot has suspended indefinitely plans to build a new compact vehicle at its plant in Madrid amd the manufacturing of a dual clutch transmission at Valenciennes, France. The company is delaying this by seven months while it looks at other options with GM.