These two giants, namely the General Motors and Peugeot-Citroen groups have shaken hands on sharing the technology and platforms for all the future vehicles.
The deal has been done keeping the following points on mind: –
- The General Motors is suffering huge losses in Europe.
- The PSA Peugeot-Citroen Group is also under debts. It needs money to invent new platforms and technologies.
So, General Motors will buy 7% stake in the French PSA Peugeot-Citroen Group and the PSA Group will get the much needed money, approx. 125 Billion USD will be merged while this JV won’t give GM any rights over management but will help with new product direction which they need for Opel, the German brand which they own.
The deal is designed so that they can keep the production costs as low as possible by sharing the platform and can bulk purchase raw and finished materials. The first models are expected to be out on production lines around 2016, if the world survives 2012!
News Source: IndianAutosBlog.com