Will Toyota's Joint Ventures With Psa Continue?

[FROSTYBALLS]

On the Autocar website:

"Reuters reports PSA-Citroen is rapidly running out of operating capital, meaning drastic action is required. The Peugeot family, founders of PSA Peugeot Citroen, could step back to let GM take over the ailing business. City sources have already warned that PSA could get close to not having enough free cash to run the business by the end of 2013.

A report from news agency Reuters suggests that if GM were to take control of PSA it would want to shut down factories and make redundancies in France and Germany, something the French government is unlikely to let Peugeot family do in its home market.

Peugeot is reported to have sought finance for the business elsewhere, but a lack of willing bidders has forced it to turn to GM, which owns seven per cent of the current business. The move was made with the support of current PSA Chief Executive Phiippe Varin, reports Reuters.

A similar bid to sell a substantial stake to a consortium led by Dongfeng Motor Group has already fallen through.

Overall the Peugeot family owns a 25.4 per cent stake in the company, but controls 38.1 per cent of the voting rights.

Speaking to Reuters, sources close to the ongoing discussions said: “The Peugeot family has now accepted that they'll lose control.

“PSA will need to present a new industrial plan for people to underwrite a capital increase, and the only hope is GM. They (GM) are ready to inject more money if they can control the business, integrate Peugeot and Opel and rationalize production.” Peugeot, which is heavily reliant on sales in its home territory, is fighting for survival according to the report.

GM bought 7 per cent of PSA in February 2012. Since then, the French Government stepped in with financial aid for Peugeot's own bank, ensuring it could still offer competitive finance to new car buyers.

The deal now hinges on GM. Sources say GM bosses need assurances that they would be able to cut plants and jobs “at reasonable cost.”

Widespread cuts in France, which would be almost certain under GM control, would be fiercely resisted by President Hollande's government. However, the French Government is said to understand that in order to return to profit Peugeot either needs to seek a larger tie-in with GM, or seek a similar deal with another industry partner. Peugeot, which employs 77,000 workers in France, has already mothballed its production plan in Aulnay and is scaling down production elsewhere.

Autocar noted last year that in bailing out PSA, the French government might have harmed long-term deal prospects.

Neither Peugeot nor GM has commented on the story."

So, if control does pass to GM, where will Toyota stand as regards joint ventures with PSA - the Aygo/107/C1 and the Proace van.

The new Aygo/107/C1 is due in 2014. GM have recently introduced the Adam, and the Agila is due to disappear next year. Suzuki are replacing their version of the Agila , the Splash, and Alto with one model in 2014, built in Thailand).

GM already have a range of vans under their joint venture with Nissan and Renault, competing in the same market segment as the PSA panel vans (which includes the PSA-made Toyota Proace).

[MikeSh]

I was reading this article earlier today:

http://www.bbc.co.uk/news/magazine-23055008

which is about the nightmare Goodyear is having with 'downsizing' a French plant.

So I'm a bit surprised GM want to get more involved in Peugot than they are now. Sounds like it might be better to lurk on the sidelines till the whole thing implodes and then pick up the bits that are worth having for a pittance.

I'd think the new Aygo/107/C1 is too far advanced to stop at this stage - I'd think the contracts for the next few years are pretty much set in stone by now, and I doubt GM would start messing immediately. They could probably profit by a 107 as much as an Adam, much as Ford have Mazda.

[Cyker]

Well here's hoping they can sneak the Toyota 1.4 D4D into it; It'd be a little rocket ship!