General Motors and Peugeot Citroen could join forces 0

General Motors and Peugeot Citroen may join forces it has been reported across the automotive industry.

Aiding a poor European performance

General Motors are attempting to turn around their extremely poor performances in Europe. Last year most of their record profit and sales came from the United States. Imagine if they had actually performed well with Vauxhall and Opel in Europe, they would certainly be way ahead of the competition.  Both made a loss last year for General Motors. Although the loss was a lot less than the loss made in 2010, break even projections were forced to be withdrawn leaving the company red faced. Many experts believe that there could be an alliance between the two major automotive company’s following a disastrous European performance.

Production costs lowered

General Motors want to lower the costs of production. Peugeot and Citroen could be just the company to help that happen. The current talks discuss the possibility of vehicle and parts sharing, which would greatly save costs.

Shares increased

The actual talks have not officially confirmed however but Peugeot have said that talks are currently underway with an unnamed company. Shares have soared since La Tribune reported that unnamed partner to be General Motors. Shares increased by 9.5 % at one point earlier this week.

Previously failed talks

Peugeot are said to be taking progressions with great caution. They will be mindful of previous talks with Mitsubishi when talks failed back in 2010 following advanced discussions.

Help with overseas operations?

Peugeot themselves are not performing greatly at present. Like Opel, they also face a reconstruction process whereby losses need to be made up for. They are specialised to sales across Europe and lack a decent export market, just like Opel. It is for this reason that many believe that the companies cannot help each other as they are in the same boat in terms of European performance.

Many believe that there is a lot more to this story. Some believe that it is not only European operations that are set to benefit. Plenty of overseas matter will be attended too. That would make complete sense as both companies could use an export market to avoid being stuck in the European market.

Peugeot could use General Motors’ expertise to improve their performance in Latin America where the company is greatly losing money.

Either way, Peugeot will be adamant that any sort of deal will allow the French company to remain independent.