GM yet to reap full benefits of European alliance plans
By Edward Taylor
FRANKFURT (Reuters) - General Motors Co (GM.N: Quote) scaled back its alliance with Peugeot (PEUP.PA: Quote) on Thursday and put a brave face on yet another setback for its efforts to seek growth in Europe through collaboration and partnerships.
It was the second time in a year GM had trimmed its expectations on the deal it agreed in February 2012, but it said the alliance could still offer up new opportunities.
In a joint press release, the carmakers canceled a joint vehicle project and said annual savings from sharing development costs on a raft of projects will now come to only $1.2 billion, rather than $2 billion.
"The partners are now focused on execution of the alliance while remaining open to new opportunities," GM's executive vice president and Opel Chief Executive Karl-Thomas Neumann said.
In the early days of the alliance, Peugeot and GM unveiled plans for at least five vehicle and powertrain programs.
But on Thursday PSA Peugeot Citroen and General Motors said they would stop joint development of a common vehicle platform and small petrol engine, once again reducing the scope of what was intended to be a broad-based alliance.
Work to develop a light commercial vehicle, a multi-purpose people carrier and a crossover SUV would continue, they said.
"Joint ventures always start with overly ambitious targets," ISI analyst Arndt Ellinghorst said, adding that he currently estimated joint savings for Peugeot and GM to amount to zero. Continued...