General Motors and PSA Peugeot Citroen will announce their joint purchasing agreement soon, though they have no immediate plans to build cars together in Brazil, GM executives said on the eve of the Sao Paulo motor show which opened for today (22 October).
“So far the entire focus of the alliance has been Europe and I expect that to continue for some time,” GM’s South America chief Jaime Ardila told Reuters at an event ahead of the show’s media preview.
Last month, French and Brazilian union officials had said PSA Peugeot Citroen and GM were working on plans to build small cars together in Brazil. Under the tentative plan, the allied automakers would pool production of two new models for Peugeot Citroen and two for GM. No decision had been made on a production site, union officials said, according to the news agency.
GM and PSA have several factories between them in Brazil alone, producing Chevrolet, Citroen and Peugeot brand cars. There are also plants in Argentina and, in GM’s case, Colombia.
Under their alliance announced in February, in which GM took a 7% stake in Peugeot, the two car makers aim to save US$2bn annually within five years from purchasing, logistics, and joint development of new vehicles and technologies.
Referring to the purchasing agreement, in which both companies pool purchasing as a way to cut costs, GM chief executive Dan Akerson told Reuters on Sunday: “There will be announcements later this month, early next month on that.”
Akerson called bringing GM’s Cadillac luxury brand to South America in the next five years a “possibility.”
GM currently sells brands all of its models assembled and sold locally as Chevrolet.
Ardila said he still saw the South American region being profitable for the company this year and reiterated that GM saw sales in the region reaching 1.5m vehicles a year by 2015.
Akerson added that the automaker remained “cautiously optimistic” about vehicle demand in China, where it is the market leader. He said GM had gained market share which the company now estimates at about 15%.