General Motors Announces European Partnership

General Motors has now announced a partnership with European company PSA Peugeot Citroën. The partnership is expected to combine the powers of both companies as they embark together on a strategic and large global alliance. Both companies expect the alliance to contribute to their profitability worldwide and General Motors is hoping that the alliance will help them gain a larger customer base in Europe. The two companies plan to focus their alliance around two main business ventures. The first important goal of the alliance is to share the vehicle platforms, components, and modules of both companies. Second, the two companies hope to combine their purchasing powers to source commodities, components and other goods and services from now joint suppliers. Despite the partnership however, the two companies will continue to market and sell independently of one another. But the two companies will not be focusing on these two areas exclusively. The two companies have plans to use their partnership for further ventures, such as stock-related partnership prospects. “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.” Likewise PSA Peugeot Citroën is also excited about the partnership. Philippe Varin, who is the chairman of the managing board at PSA Peugeot Citroën, said, “This alliance is a tremendously exciting moment for both groups and this partnership is rich in its development potential. With the strong support of our historical shareholder and the arrival of a new and prestigious shareholder, the whole group is mobilized to reap the full benefit of this agreement.” The partnership will also allow the two companies to help each other reduce their emissions. They will share some of their platforms, modules, and components. This sharing will achieve financial saving and leverage volumes and advanced technologies. They also plan to use the partnership to implement their programs in Europe on a more cost-efficient level. The partnership actually became a much larger prospect than originally planned. Originally, the two companies were planning to work together on their small vehicles and MPVs and crossovers. But after they started talking about the potential partnership they agreed together that a partnership that incorporates all of their vehicles would be best. They are also considering working together to develop a platform for low emission vehicles. They even already have plans to launch such a vehicle in 2016. Due to the terms of the partnership the two companies will now be making their purchases as a single purchasing entity. They will do this to take advantage of the purchasing expertise and purchasing contacts of both companies, as well as the customer loyalty benefits that each company has earned individually.