PSA Group reportedly is in talks to build Toyota-owned supplier Aisin‘s automatic gearboxes at one of its own plants.

The combined scale of PSA and Opel has added impetus to negotiations with Aisin, three Reuters sources told the news agency, helping to overcome the Japanese company’s reservations.

Toyota has a small car building joint venture with PSA in the Czech Republic and builds engines and transmissions for its French and English assembly plants in Poland.

The Opel acquisition announced in March, which valued the General Motors business at EUR2.2bn (US$2.44 billion), brings “a larger sales volume and therefore more profitability for an investment”, one Reuters source said.

Reuters said PSA currently buys in six- and eight-speed Aisin gearboxes made in Japan and China for its Peugeot, Citroen and DS brands. Assembling the six-speed (referred to as EAT6 by Peugeot) in France would secure a competitive supply, reduce currency risk and help fill its own plants.

For Aisin, 34%-owned by Toyota and affiliates, it would establish a first European production base amid growing demand for automatic gearboxes which currently equip about 20% of PSA cars sold, the news agency said, noting that automatics are less popular in Europe than in the US but growth is set to accelerate with tighter emissions rules and demand for electric, hybrid and increasingly automated cars, to which manual gearboxes are unsuited.

PSA and Aisin both declined to comment to Reuters which noted Aisin has previously signalled an openness to partnerships.

“We’re absolutely not averse to joint programmes with non-Toyota companies,” the supplier’s president Yasumori Ihara said in January, the same month that PSA chief executive Carlos Tavares told workers at his company’s Metz transmissions plant an unspecified production deal was under consideration.

But the proposal had made little headway until the tie-up with Opel, the Reuters sources said. An agreement could now be finalised within months, subject to successful closing of the Opel acquisition later in the year, and PSA managers may discuss the plans with unions in works council meetings next month.

The Reuters sources said PSA-owned production under licence was likely, reflecting the Japanese supplier’s wariness over investing. That could evolve into a joint venture or outright sale once the plan had proved its worth.

The production investment would pit PSA’s Tremery factory near Metz, eastern France, against the northern Valenciennes which has more automatic gearbox expertise though Metz has more spare capacity, the sources said.

“There’s easily enough room on the Metz site,” Christian Lafaye, an official with the Force Ouvriere union, told Reuters.

“They can come and install their tooling tomorrow if they want.”