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GM and PSA detail four new co-developed vehicle projects

New details have emerged this morning regarding a partnership between General Motors and PSA Peugeot-Citroën. Following talks that started back in February, the American and French automakers will apparently team up to develop several vehicles, including a small MPV for Opel/Vauxhall and a compact crossover for Peugeot. Also planned is a small car for both Opel and Citroën.
Additionally, the two companies will co-develop a low-CO2-emitting small car platform to underpin the next generation of Opel and PSA models. The detailed plans call out a midsize platform to be shared between Opel/Vauxhall and Peugeot/Citroën.
As much as $2 billion in savings are expected in the next five years as a result of this venture. In a statement from GM and PSA, "All four projects will be developed combining the best platform architectures and technologies from alliance partners."

Peugeot maker PSA posts record profits ahead of FCA merger

PARIS — Peugeot maker PSA Group said its profitability reached a record high in 2019 but the French carmaker forecast falling industry sales in Europe this year as it pursues its merger with Fiat Chrysler, which is strong in North America. PSA has trimmed costs in areas such as the procurement of components as it has integrated its acquisition of Opel and Vauxhall, boosting operating margins to 8.5% last year. The group, which also produces cars under the Citroen and DS brands, offset a slump in vehicle sales by selling pricier SUV models, with launches including the Citroen C5 Aircross helping to lift revenues by a higher-than-expected 1% to $81.2 billion (74.7 billion euros). That helped it stand out in a car market where some rivals including France's Renault have struggled with sliding revenues and profits, amid a broader downturn in demand. PSA's group net profit increased 13.2% to a record 3.2 billion euros, and the company increased its dividend against 2019 results to 1.23 euros per share, up 58% from 2018 levels. The carmaker was "once again very solid", analysts at brokerage Oddo-BHF said in a note, adding the results confirmed the company's "best-in-class status." However PSA forecast a 3% contraction in Europe's car market this year, by far its biggest market. The tie-up with Fiat Chrysler will help it gain exposure to that group's strong presence in North America with brands like Jeep. The two companies struck a deal in December to create the world's No.4 carmaker, to better cope with market turmoil and the cost of making less-polluting vehicles. Fiat also posted more upbeat results than most rivals this year. CORONAVIRUS WEIGHS PSA boss Carlos Tavares told a news conference that the two groups were both in good shape and well placed to face market challenges together. He said he did not expect any major regulatory hurdles to the merger, adding it had so far submitted 14 approval requests to competition authorities out of the 24 it needs. There are no immediate plans to change anything in the large portfolio of brands within the combined group, he added. However the companies still face problems this year, including the coronavirus outbreak which has paralyzed production in China and hits carmakers' supply chain. PSA said the coronavirus impact was still difficult to assess. It factories in Wuhan, at the epicenter of the outbreak, are due to reopen in the second week of March.

PSA plans to cut 8,000 jobs

The French government has said that PSA/Peugeot-Citroën must make large job cuts in order to stay financially afloat. A large restructuring would also need to take place as the carmaker deals with the current European economic climate and a production capacity excess.
According to an Automotive News Europe report, the government of France launched an investigation into the "financial health" of PSA, and its results subsequently criticized several decisions the company made, including the shuttering of plants near Paris without leaving failsafe options for production like its Madrid factory.
The result of the study is that the French automaker plans on cutting 8,000 jobs - on top of the 3,500 axed last year. Also planned is the closing of its Aulnay plant near Paris, along with a significantly downsized workforce at its Rennes plant in western France. Last year, PSA's small car plants were running at only 61 percent of maximum capacity.