The CEO of General Motors has told the Wall Street Journal that GM and PSA (Peugeot Citroen) will start development of two new cars by this autumn. The first car will be the size of a Corsa or 208 and will be for the South American market. The second one will be a large saloon (the next Insignia possibly?).

The intention is to share development of a huge range of designs including off-roaders and MPVs over the coming years, as both companies try and cut costs. The alliance has met with considerable scepticism, as GM has a dire record of failed alliances: it has tried with Isuzu, Suzuki and Subaru in Japan (all now ended) plus Fiat in Europe, which ended when GM paid Fiat $2 billion in 2005 to go away.


The Chief Executive of GM, Dan Akerson said that GM has learned from its past mistakes and that hard times in Europe have made companies more willing to cooperate with one another. However, the problem has never been a lack of willingness to make alliances – it has been finding ways of making two companies with two different agendas work together year-after-year.

GM believes the alliance with PSA can save it $1 billion a year, but it only addresses the issue of cutting development costs. GM will still have more factories in Europe than it needs, no matter how many alliances it makes. That issue is expected to be tackled later this year.