General Motors chief executive Dan Akerson has said GM and PSA Peugeot Citroen aim to begin joint development of at least two passenger cars by this autumn and described the new alliance between the companies as a changed way of doing business for the Detroit-based automaker.
The cars are likely to go on sale by 2016 in global markets, Akerson told the Wall Street Journal (WSJ).
Sources familiar with the plans told the paper the first vehicle to be launched would be a superminicar for the South American market, where GM and Peugeot are looking to turn around their operations.
Both automakers have plants in Brazil and Argentina and currently sell small cars based largely on previous generation models sold in Europe but PSA, in particular, now plans to launch models on the same timeline as in Europe.
Akerson told the WSJ he wants the partnership, criticised by US and European investors, as being too limited in scope to significantly improve the standing of either company, to go well beyond joint purchasing and parts-sharing. GM, he said, was shifting some executives to Europe to work on expanding the alliance.
“This isn’t just capacity reduction,” Akerson said in an interview with the paper, responding to critics who say the deal doesn’t address GM’s overcapacity problems in Europe.
“This is a whole new way of looking at the business. There will be other specific initiatives that will underpin the master agreement; this deal could see significant gains on a number of levels.”
The automakers have said the deal, under which GM has agreed to pay about $420m for a 7% stake in Peugeot and the French firm also is raising money through a rights offering, will save them $1bn each a year from 2017.
Peugeot spokesman Jonathan Goodman declined to comment to the Wall Street Journal on details of future plans. “We are looking at a number of different development projects and are in the process of evaluating them,” he said.
Peugeot’s top global managers are set to meet on Thursday but don’t plan to discuss specific joint projects with GM in Latin America or Europe, a ‘person familiar with the situation’ told the WSJ.
The paper noted that eveloping two separate vehicles off the same platform would cost slightly more in total though splitting the cost between the two automakers could cut the bill by at least 25% for each project.
But it added that, with few exceptions, alliances that focus on joint product and materials savings have been disappointing in the past.
“Such savings are highly theoretical at present and rely heavily on successful execution and assigning accountability for meeting goals,” Barclay’s analyst Kristina Church said in a research note.
Akerson said industry scepticism fails to consider that GM has learned from past mistakes and that hard times in Europe have made companies more willing to cooperate with one another.
“We don’t want shotgun weddings and that is what we had with Fiat [referring to the Powertrain tie-up that ended acrimoniously in 2005]. That deal was asymmetric,” he said. “We are not going to shy away from the possibility of making a difference now because of a bad history.”
After reaching agreement by this autumn to develop a minicar and larger sedan, sources told the WSJ that, by year end, the automakers want to forge deals to develop additional vehicles together, including crossovers and multipurpose vehicles and work together in several global markets rather than focus on Europe.