GM, Peugeot create global partnership, aim to save $2 billion annually from alliance

GM Peugeot Citroen

General Motors and PSA Peugeot Citroen announced today that they have formed a long-term and broad-scale global strategic alliance. The alliance will leverage the combined strengths and capabilities of both two companies, help reduce cost and contribute to the profitability.

The alliance is structured around two main pillars:

  • Sharing of vehicle platforms, components and modules
  • The creation of a global purchasing joint venture for the sourcing of commodities, components and other goods and services from suppliers with combined annual purchasing volumes of approximately $125 billion.

Both companies will continue to market and sell their vehicles independently and on a competitive manner. Both companies target $2 billion in annual savings from alliance.

“This partnership brings tremendous opportunity for our two companies,” said Dan Akerson, GM chairman and CEO. “The alliance synergies, in addition to our independent plans, position GM for long-term sustainable profitability in Europe.”

The companies said that they intend to focus on sharing small and midsize passenger cars, MPVs and crossovers. They are also considering developing a new common platform for low-emmission vehicles. The first vehicle from the common platform is expected to launch by 2016.

– By: Omar Rana