2012 Geneva International Motor Show (GimsSwiss) (GIMS)
Jonathan Goodman, Head of Press and Corporate Communications, PSA Peugeot Citroen, sat down with Lou Ann Hammond, CEO, www.drivingthenation.com at the 2012 Geneva Motors Show to talk about the new seven percent alliance between General Motors and PSA Peugeot Citroen.
PSA Peugeot Citroen has the second-largest market share in Europe (behind VW group). Two hundred years ago they started in metal and have, over the years, evolved into an automobile company.
On a global scale, Renault/Nissan are bigger than PSA Peugeot Citroen, but in Europe PSA Peugeot Citroen owns fourteen percent of the marketshare. Forty-two percent of PSA sales are outside of Europe, and 58 percent in Europe.
The Peugeot family is the number one shareholder, owning twenty-five percent of the company and thirty-eight percent of the voting rights. General Motors is the second-largest owner. They will buy parts together, becoming the number one automotive part purchaser in the world, to the tune of $130 billion. Peugeot also has a logistics arm, Gefco, and a banking arm, Banque PSA Finance. PSA owns 57.43% of automotive supplier Faurecia. Goodman sees all the “stuff consumers don’t see” as the backbone of the arrangement between General Motors and PSA Peugeot Citroen.
PSA Peugeot Citroen is used to working with other companies: there are about twenty million diesel cars on the roads that are a product of a Ford/PSA agreement. PSA supplies petrol engines to BMW/Mini.
There is no “put” in the agreement with PSA like there was with Fiat. If the deal goes sour, it goes sour without a $2 billion payout, as Fiat received.
PSA alliance – Follow the money
In the United States General Motors Acceptance Corporation, GMAC, now Ally, is well-known in United States. Many thousands of people have loans through them. There are years that General Motors has been a mortgage company, some a car company, depending on how profitable the two were.
Tim Lee, Opel Supervisory Board, told me that Opel, GM-Europe, does not have straight financing in Europe. Financing is parsed from different financial operations around Europe. Lee said there was a possibility Opel, and GM-Europe could use Banques PSA Finance for their loans. This would mean that General Motors would own seven percent profit from each loan. Businessweek reported that Banque PSA Finance announced earnings results for the full year ended December 31, 2011. For the year, the company reported revenues of EUR 1,902 million against EUR 1,852 million for the same period a year ago.
Besides being in Europe, Banque PSA Finance is already in Latin America, Russia, and China. Once again Goodman says it’s not in the initial scope, but there are certain commonalities that are coming from the bottom and the top of both companies.
Goodman says the scope of the agreement hasn’t been completely worked out, but it could include diesel hybrid engines, electric bicycles,
Any chance PSA Peugeot Citroen would go into the United States? As lovely as that sounds to Goodman, he says there are other priorities on their plate.