PSA And Mitsubishi: No Tie-up, It's A Hook-up

With the Chinese planning an electrical assault on Europe, with Nissan preparing their Leaf and with Renault charging-up Zoe, Peugeot-Citroen (PSA) is probably feeling a little exposed right now. Bad enough PSA failed to work out an agreement with Mitsubishi. Now they’re deficient in the no carbs category. But don’t worry, a white knight is coming to the rescue and offering them a ready-made electric vehicle. That’s right, they couldn’t work out a capital tie-up, but PSA and Mitsubishi Motors worked out an agreement on electric cars.

Business Week reports that Mitsubishi Motors will sell PSA their i-MiEV’s for them to brand under the “Peugeot” and “Citroën” marques. Production will begin in October and sales will start by the end of 2010. Other facets of this new agreement were that while a capital tie up was off the table, co-operation wasn’t. They will focus on 5 year partnership which includes a planned Russian factory.

The Nikkei [sub] confirms the report, adding that “the production will start in October at a plant in Kurashiki, Okayama Prefecture, with plans to supply an aggregate 100,000 i-MiEVs by the mid 2010s.” It won’t be a simple re-badge. “The car’s appearance and interior will be modified to fit the European market and will meet the required safety standards,” says the Nikkei. Also, “the vehicle will be sold under the iOn brand by Peugeot and under C-Zero by Citroen. Sounds like an air freshener and a diet drink, but not as bad as i-MiEV.

PSA and Mitsubishi have co-operated before these talks. Mitsubishi supplied PSA a CUV,. So, we know these 2 companies can work together. The market liked what they heard; Mitsubishi’s shares went up 2.5 percent and PSA’s shares closed up 2.8 percent. Makes perfect sense. I mean, you LOVE your girlfriend, right? And you work well together. But that doesn’t mean you want to marry her, does it?