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Peugeot Citroen need GM to survive

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The Peugeot Citroen group – PSA – sees their alliance with General Motors as a necessity in order to survive in the long term and in order to become a global player.

The company’s head of communications, Xavier Crespin, admitted at the launch of the Peugeot 2008 SUV in France, that there was no alternative but to look at the GM alliance as a much-needed life-line for continued survival.

He continued to say that in order to protect PSA then the alliance had to be accepted; the economic problems that have been sweeping the globe ever since 2008 are too big and PSA is too small, so in order to survive it needed an alliance with a bigger group.

It has to be mentioned that the PSA-GM alliance was under threat because it wasn’t known if the French government and unions would object to it in order to potentially cost French jobs when the two companies bring down their cost base.

However one does have to keep in mind that otherwise PSA would not survive for long at all, so those fears don’t really have legs to stand upon. On the other hand, the alliance will bring new technologies to the Peugeot Citroen group, for instance automatic transmission which are needed for smaller engine equipped vehicles – which Peugeot Citroen do make a lot of.  The two companies will also create three new vehicles together that will come to light by 2016 and the potential is ot share the development costs for future powetrains as well.

Just like most of the European manufacturers, the French carmaker lost a considerable amount of money in 2012, and they’re rumored to seriously considering shutting down a manufacturing plant near Paris.

On the other hand, the Peugeot brand is actually being revitalized with plans to take the product range further upmarket in order to increase their profit margins.

 

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