GM-PSA Drops Planned Joint Small-Car Platform

General Motors Co. and PSA Peugeot Citroen are scrapping plans to co-develop a platform for small cars and may scale back other aspects of the alliance they signed last December.

PSA tells reporters that "the business model just wasn't there" for the B segment platform. The company's third-quarter financial announcement earlier today says the project and "relevant terms of the development agreement" are under review.

One result, the company adds, is that the eventual $1 billion in cost savings it expected from the GM alliance "may be readjusted downwards." But it also says unspecified new initiatives could be launched.

The decision does not affect the alliance's first joint project: production of PSA-based B segment MPVs at a GM factory in Spain in 2016. PSA and GM also continue to co-develop C segment midsize MPVs and crossovers.