PSA, GM Trim Co-Development Plans

General Motors Co. and PSA Peugeot Citroen have finalized plans to co-develop three types of small vehicles and launch the first them under their own brands in 2016. They also have ended talks about jointly developing midsize cars for both groups.

The companies formed a strategic partnership in February, with GM agreeing to take a 7% stake in PSA. They have been adjusting the scope of their joint activities since then.

GM says the just-approved programs will involve C-segment crossovers for the Peugeot and Opel/Vauxhall nameplates, B-segment multipurpose vehicles for both companies and a low-carbon-dioxide B-segment platform for next-generation vehicles sold by each partner in Europe and elsewhere.

PSA describes the plan as generating replacements for the Opel Corsa and Peugeot 208 cars, a small minivan and a compact vehicle platform. The partners say all co-developed vehicles will be "highly differentiated" to match their respective brand characteristics.

The companies also have signed a definitive agreement to create a new joint purchasing organization in Europe. That initiative is subject to antitrust approvals.

PSA says the partners shelved plans to co-develop replacement for such midsize models ad the Citroen C5 and Opel Insignia after failing to make a convincing business case. Analysts say pursuing the project could have raised political issues about whether the vehicles would be built in France or Germany.

GM and PSA previously dropped plans to co-design a new dual-clutch gearbox and a small car for the Latin American market. But they say they do expect to eventually expand their partnership to include a new generation of small gasoline engines derived from PSA's global "EB" small-engine program.