Detroit, MI, United States (4E) – General Motors (GM) and PSA Peugeot Citroen announced Tuesday plans to manufacture their next generation of small vehicles in the same facility in Spain as the U.S. and French car makers forge a new strategic partnership.
Peugeot said that both companies will begin building B-segment cars – similar to the new version of C3 Picasso of Peugeot — at the Zaragoza, Spain-based plant of GM, for market launch expected in late 2016.
Peugeot said that GM’s Opel division will do the engineering for the new cars, while Peugeot will provide the power trains for the new vehicles, which will be sold to the market under the both brand names.
GM, which seeks to reverse the loss-making operations of its European unit Opel, bought a 7 percent stake in the struggling French car maker 2012, and they have initiated joint projects to help bring down costs.
Opel and Peugeot launched a joint purchasing system and are jointly working to develop small petrol motors. The initiatives are aimed to create annual savings of up to 1.5bn euros ($2bn) by 2016.
Both Opel and Peugeot are struggling with production overcapacity as sales in Europe fell to near 20-year lows, and each are shutting down one plant.