PSA And Toyota Open Tie-Up Season
Following the many inter-company alliances and dalliances is becoming as cumbersome as covering the couplings in a swing club. PSA Peugeot Citroen is said to be in talks with Toyota. The same PSA that just hooked up with GM is reportedly talking tie-up with GM’s arch nemesis Toyota. They discuss sharing PSA’s Sevelnord plant in northern France, where PSA’s erstwhile partner Fiat pulls out. Still with me?
The rumor has been planted by the French wire service AFP, which has it from the usual source close to the matter. French union official Ludovic Bouvier only wants to confirm that the talks “are with an Asian group.”
Peugeot has had a partnership with Toyota in the Czech Republic since 2002. Fiat is to leave Sevelnord in 2017. PSA has an alliance with BMW. BMW on the other hand also has an alliance with Toyota. Still with me?
These talks will go nowhere. The joint Czech plant had to cut production. The Valenciennes plant isn't exacly running overtime either. I don't think Toyota needs another plant in high-cost Western Europe anytime soon... unless they plan to make the Prius C...but that's not going to happen via a joint venture.
Little wonder that the PSA PR man didn't have to say anything more than "Asian automaker" because he was likely the source of the print leak! So it's either about a three-way tie up between Toyota BMW and PSA or a tie up between between GM and PSA… Or it's about… Or is about what's really important in this business, namely leverage in negotiations!
"Following the many inter-company alliances and dalliances is becoming as cumbersome as covering the couplings in a swing club." So True. Also boring, since nothing major or useful seems to come of these alliances, except, maybe wastage of money that could have been put into project development. The couplings in a swing club might be more interesting - and as they say, a picture is worth a thousand words...
The big issue in Europe is that it has excess capacity with no way to use it. This is the singular largest issue that is facing PSA, FIAT, and Opel at the moment. Slumping auto market, strong unions with high fixed costs and little flexibility. To top it off there is political pressure, Sarkozy insisted with the GM tie-up that union jobs stay in France. It should also be mentioned that the Sevelnord also already has a partner in FIAT, and builds the Fiat Scudo there. This obviously will end with FIAT having capacity and union issues of their own. It could be a good deal for PSA . For PSA, having Toyota occupy that space would alleviate the capacity issue with the departure of Fiat as a partner there. The question is does Toyota even want excess capacity in Europe? They can import Thai cars to Europe under a free trade agreement, and the European market has imploded. There may be a tie-up akin to the Toyota Aygo/Peugeot 107/Citroën C1, but building it in high-cost northern France may not be smartest move.