GM Makes Bad Bet With PSA, May Have To Write Down Investment

When GM bought seven percent of the moribund PSA Peugeot Citroen five months ago, the happy couple praised monstrous synergies and annual cost savings of $2 billion a year coming from the – ahem – tie-up. Hope springs eternal, but currently, the value of this dubious investment is deflating faster than a popped balloon. Even GM is realizing it and tells the Treasury that it may have to write down that investment if things don’t get better soon.

The ever so vigilant Reuters actually went to the trouble of reading the complete 10-Q GM filed with the SEC in connection with GM’s recent quarterly report. In that filing, GM says:

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Car Sales In Spain, France In Ruins

And now, back to the usual blood and tears from Europe: July new cars sales dropped 7 percent in France and thudded 17 percent in Spain “as consumers cut back on costly goods in the face of economic uncertainty,” says Reuters.

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Renault "Not Dying, Unlike Some Others On The Ward"

If you look at half year sales in Europe, then you see Renault as the worst performer of the volume makers. With EU sales down 17.09 percent, the Renault Group took a bigger hit than European patients Opel (- 15 percent) and PSA (-13.9 percent). Even troubled Fiat was doing better than Renault, by a hair (-17.08 percent for Fiat.) Whereas the percentages carry the smell of death, Renault’s half year results smell downright rosy.

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Despite Abuse and Theft, Parisians Have Taken 138 Million Rental Bicycle Rides; Cars Are Next

Your humble author is TTAC’s resident cycling enthusiast, as shown in the eminently regrettable photo above which can best be titled “35-Year-Old Man Takes Mountain Bike To Skatepark For No Good Reason.” When I was younger, I had unveiled contempt for people who drove somewhere when they could ride. Three knee surgeries and a child later, I’m not so sure. Still, cycling is gaining momentum across Europe in precisely the same way that the economy isn’t. The public-bicycle scheme in Paris, Velib, now profitably shares 23,000 public bicycles across a subscriber network of 225,000 people — and the electric-auto-sharing service which has been operating for over half a year now looks to be headed for similar success. The implications regarding private and public property raised by both services are worth discussing.

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PSA Peugeot Citroen Deep In The Reds

Europe’s second-largest car maker and GM alliance partner PSA Peugeot Citroen ended the first half of the year with its auto division 662 million euro ($800 million) in the reds, Reuters says.

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TTAC Correspondents Debate: Why Does Toyota Buy Vans From PSA, Hiace Be Damned?

Yesterday, we talked about the odd occurrence of Toyota if not saving the hide of GM’s new partner PSA Peugeot Citroen, then at least keeping one of PSA’s plants from being closed. This by having vans made by PSA for the European market, instead of shipping them from Japan.

When we wrote that, TTAC correspondent th009 rightfully questioned why in the world does Toyota order a van from PSA if they have a Hiace. Correspondent felix offered the explanation that due to its “cab-over configuration, the Hiace won’t meet European frontal impact crash standards.” This sounded like a logical explanation, until from Finland, correspondent Perc offered a resounding “mitää???”, explaining that the Hiace has been a big success in Suomi. Finland has the same safety standards as all on Europe.

So, what is it then?

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Toyota And PSA In Tie-Up, Sevelnord Saved - For Now

While France’s new leftist government mulls a new “drive French” plan and makes threatening gestures in the direction of French car makers that dare to do something about overcapacity, in an odd change of events it is a Japanese company that will prevent a much anticipated plant closure at PSA Peugeot Citroen.

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PSA Chairman Calls Industry Minister "Evil," Warns Against Takeover

PSA Peugeot Citroen’s Chairman Thierry Peugeot lashed out against what he calls “evil attacks” by the new leftist French government and its industry minister Arnaud Montebourg. He also raised a specter that makes any patriotic politician sit up and listen: Hostile takeovers.

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Pelata Out At Renault

Patrick Pelata is leaving Renault. This a year after the former Chief Operating Officer took the fall over the spy scandal.

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The Peugeots Strike Back Against Their Government

The Peugeot family is on war footing with the French government. It “hit back at suggestions by a government official that its members have favored their own financial interests over the development of the family-controlled auto maker,” says the Wall Street Journal. Basically, the family followed the line of argument suggested by TTAC.

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Leftist Minister To Interrogate Peugeot Family Over Dividends. What Dividends?

The Peugeot family will receive an invitation from French industry minister Arnaud Montebourg, but not for tea and cookies.

The minister “plans to summon members of the Peugeot family to explain why the car maker had continued to pay dividends even as it was facing mounting difficulties,” Reuters says.

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France's Socialist President Offers "Buy French" Plan

Newly elected French socialist President Francois Hollande told GM’s partner PSA Peugeot Citroen to renegotiate a plan to lay off 8,000 workers. However, Hollande admitted he could not halt Peugeot. Hollande promised government money to “encourage consumers to purchase French-made, environmentally friendly cars,” Reuters reports. Soon he will admit he cannot do that either. The “French made” part is sure to get his government in trouble with the EU.

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GM Won't Share Volt DNA With French Partner

The new energy relationship between PSA Peugeot Citroen and BMW is just about done now that BMW and Toyota intensified their cooperation. An Opel executive dashed hopes that the French will be able to use GM technology instead. “The honest answer is I can’t imagine that,” Opel development chief Rita Forst told Reuters, when asked if the two companies would share green car technology.

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With Friends Like These: GM-Partner PSA Peugeot Citroen Gets It On The Chin

GM got itself a great new partner. Global sales of PSA Peugeot Citroen, the besieged company that is now 7 percent owned by the General, dropped 13 percent, Reuters says. PSA’s European sales dropped 15 percent, which illustrates how much PSA’s ill fortunes are tied to those of Europe.

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Plug-In Prius: The Car For Royalty And Heads Of State

What car does Albert Alexandre Louis Pierre Grimaldi a.k.a. His Serene Highness Albert II, Sovereign Prince of Monaco drive? He drives a Prius.

Today, he switched it for a plug-in hybrid Prius. The minute the first plug-ion hybrid was available in Europe, Toyota shipped it to Monaco as a two month loaner.

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Your Next Toyota Yaris Will Be French

The folks at Toyota have been complaining about the low euro and the strong yen long enough. Now, they are putting the low Euro to work. Starting in May 2013, Toyota will ship its Toyota Yaris from Toyota’s Onnaing-Valenciennes plant in France to the United States, Canada and Puerto Rico.

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Flippant Remark Haunts Ghosn A Year Later

Less than a week before Nissan’s stockholder meeting on the 26th at the Pacifico in Yokohama, Carlos Ghosn’s inner circle in Paris and Yokohama finds itself chasing a warmed-over rumor. Today, Bloomberg writes that “Chief Executive Officer Carlos Ghosn is considering stepping down before the company’s next mid-term business plan begins in about five years.” A source close to Ghosn calls it “absolute nonsense and a yawner.”

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La Tribune: Splitsville At BMW And PSA

Turmoil at GM’s new European partner PSA Peugeot Citroen. As if rumors of embargo-busting and of an impending guillotining of CEO Philippe Varin aren’t enough, now there are reports that BMW wants out of the hybrid alliance with PSA.

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La Tribune: Peugeot Family Thinking Of Sacking PSA CEO Varin Over Lost Sales And GM Alliance

PSA’s owners are not happy with CEO Philippe Varin. They would already have sacked him, would a replacement be on hand, reports France’s La Tribune. Reason for the disenchantment: Catastrophic sales, and the alliance with GM.

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Renault Wants Two New Brands To Take On Volkswagen Globally

When Renault had rolled out its Alpine A110-50 a few weeks ago, the logical conclusion was that this was not just to celebrate the 50th birthday of Alpine. Today, Renault COO Carlos Tavares tells Bloomberg that Renault is thinking about bringing back Alpine as a brand for sports cars, and to create another high-end brand for luxury models in a bid to become a true global carmaker.

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Renault Revives The Berlinette, Maybe

Alpine is back from the dead, in a way. Celebrating the 50th anniversary of the Alpine A110 Berlinette, Renault today unveiled the Renault Alpine A110-50. Alpine may be back, but only as a zombie: Officially, the A110-50 is a concept only.

For a concept, is has real world parameters.

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Yes, I Do: Infiniti Finally, Really, Officially To Start Production In China

Renault/Nissan CEO Carlos Ghosn wanted to announce it Monday or Tuesday in person in Beijing. On the other hand, the upcoming production of Infiniti cars in China leaked last week, after Nissan’s worst kept secret had kept the Chinese rumor mill in motion for more than a year. After Gallic shrugs all around, Nissan confirmed today that two Infiniti models will be manufactured locally in China from 2014. Ghosn will have to find something else to feed the media on Monday. Dim sum perhaps?

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Nicholas Sarkozy: PSA In Tie-Up Talks With Toyota

When I wrote that PSA and Toyota are exploring their sado-masochistic tendencies a tie-up of production in PSA’s ab- under-used Sevelnord plant in northern France, commenters said it will never happen. Others complained about the choice of choice illustrations.

France’s President Nicolas Sarkozy rode to the rescue of embattled TTAC, and confirmed the tie-up.

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Ghosn's Two Front China Offensive

The Nikkei [sub] must have been having intimate chats with sources high up in Nissan’s tower at the Yokohama waterfront again.

Prematurely perturbing press people at Nissan, the Tokyo wire reports that a new factory will be constructed in China, and that Infiniti cars will be built at yet another factory in China. In the meantime, Reuters cultivated sources at Renault and says that Renault will finally finalize a deal to produce cars in China.

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First Hybrid Yaris Rolls Off Line In France

TTACers have known it for quite some while: Europeans won’t get a Prius C / Aqua compact hybrid, they will get a hybrid Yaris. Today, the first one rolled off the line at Toyota’s plant in Valenciennes, in the north of France.

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PSA On The Prowl For More Cash

GM’s new partner PSA increasingly reminds of pre-carmageddon Ford: Europe’s number 2 finds itself short on cash and way too long on capacity. Other than Ford that had mortgaged everything, PSA takes more radical steps. After putting is own headquarters building up for sale, PSA is ready to sign over parts of its Aulnay car plant to renters.

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Secret Picture Reveals: Carlos Tavares Defaces Car, And Vladimir Putin Just Stands There

They did not know that TTAC’s man in the cold was surreptitiously snapping pictures with his iPhone. Again-elected Russian Prime Minister Vladimir Putin simply watched while Renault COO Carlos Tavares defaced the hood of a brand-new car with a Magic Marker. Nissan’s COO Toshiyuki Shiga grinned and did not interfere either. This is how they celebrate the opening of a new car factory, this afternoon in Russia.

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PSA Peugeot Citroen Liquidates Own Headquarters

GM’s new partner PSA Peugeot Citroen needs more cash. To raise money, PSA sells its headquarters building in Paris and will turn into a renter. Signing GM as a new 7 percent partner apparently hasn’t improved PSA Peugeot Citroen’s cash position. Au contrair, PSA’s credit rating had gone to junk.

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PSA-GM Tie Up Won't Solve Bulging Over-Capacity, PSA Admits

It must be the grand plan to make Iran walk or ride mules, because the alliance between GM and PSA is not about reducing over-capacity. This is what PSA told just-auto today. Confessed a PSA spokeswoman:

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The French Connection: GM-PSA Deal Will Bring Iran To Its Knees

Now we know why GM bought seven percent of PSA, a move for which most of the industry had no explanation. Forget overcapacity and scale effects. It was a carefully crafted plan to bring traffic in the Iran to a halt. Stuxnet is nothing compared to this.

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Pocket Rocket Lovers Of The World, Rejoice! Uhmm, Sorry. That Was A Bit Misleading. Let's Start Over.

Pocket rocket lovers who happen to live in Belgium, France, Spain, or Switzerland,rejoice! According to Brazilian enthusiast site webmotors.com.br, Renault is using to good effect its Formula 1 presence and is launching the Renault Clio R.S. Red Bull Racing RB7 in the aforementioned markets. Wow! What a mouthful for a compact car! And yes, you read right, Clio and Red Bull in the same name!

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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?

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Comrades, Come Rally: While PSA And GM Snuggle Closer, Workers Of PSA And Opel Unite

PSA and GM look at expanding their alliance. Unions are not sitting still either. Workers of PSA and GM look at forming their own strategic alliance.

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PSA Shares A Tough Sell, Offered At Deep Discount

PSA Peugeot Citroen doesn’t just have problems selling its cars lately. It also has problems selling its stock. To move the paper, a tried and true tactic is employed: Cash on the … where do you put the cash when you sell shares at a fire sale deep discount?

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Moody's: GM Deal Turns PSA Into Junk

GM and PSA praised monstrous synergies and annual cost savings of $2 billion a year as an effect of the alliance that was announced yesterday. The savings won’t come immediately, rather in about 5 years from now. Moody’s thinks it’s a bad deal, and did cut PSA’s debt rating to junk status.

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PSA And GM Are Doing It While Marchionne Watches

When the stock markets close in Europe today, PSA Peugeot Citroen and GM should announce that they are going ahead with the plan of GM buying seven percent of PSA. That according to “sources with knowledge of the discussions” that talked to Reuters.

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The Odd Couple: PSA And GM In Alliance Talks

GM and PSA Peugeot Citroen have a mutual problem: Losses in Europe. Now, the two want to share the burden. General Motors and PSA are discussing a broad manufacturing alliance, if today’s media reports from Europe are to be believed.

PSA and GM?

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PSA In The Reds

Europe’s second-largest automotive group PSA Peugeot Citroen is looking at red ink. PSA’s automotive operating loss excluding one-time items was 92 million euros ($121 million), after a 621 million profit the previous year, Reuters says.

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Ghosn: Beware Of A Drop In Europe

Renault and Nissan chief Carlos Ghosn continues to prepare the battlefield of world opinion for a drop in Europe. According to Ghosn, Automobile sales in Europe could decline two to three percent. For Renault’s home market, he expects a drop of five to six percent, Ghosn said in an interview with France Inter radio:

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PSA Withdraws From Le Mans, Claims It's The Money

When a car company removes itself from Racing, it usually has one of two reasons:

  1. The company was luckless on the racecourse and just can’t stomach paying for losing.
  2. The company is in dire straits financially, and spending money for frivolous ventures such as car racing just doesn’t look right.

For France’s Peugeot, it’s both.

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Blame It On Sergio: Fiat Flirting With PSA?

Sergio Marchionne always had been a proponent of the “the world only has room for six large global automakers” theory. Fiat and Chrysler isn’t necessarily a marriage between two robust partners. Especially in the Asian growth markets, both are weak. According to Italy’s Corriere Della Sera, Marchionne is rekindling a years-old flirt with France’s PSA Peugeot Citroen. Of course, none of the presumably dating companies will confirm the rumor. However, the rumor was started by Sergio Marchionne himself, in Detroit.

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Loose Partnership Between Renault-Nissan and Daimler Intensifies

It’s not that the cross-sharing of technologies between Renault-Nissan has been a well-kept secret. However, it is good to hear that loose alliances between unlikely partners work, while a marriages made in the automotive compatibility heaven (we are looking at you, Volkswagen & Suzuki) don’t even get to the consummation part.

Renault-Nissan announced today in Detroit that its Decherd, Tenn., plant will build Mercedes-Benz 4-cylinder engines for Infiniti and Mercedes-Benz starting in 2014.

Read this sentence carefully.

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What's Wrong With This Picture: A Mini's Progress Edition

My two weeks in Europe has drawn to a close, and I’m back at my familiar desk, in front of my familiar computer, catching up on all the automotive happenings I missed, contemplating my transition out of TTAC’s day-to-day leadership, and reflecting on all I saw over my whirlwind two weeks. And though you haven’t heard from me much in the last two weeks, rest assured that I have not forgotten TTAC, nor have I missed any opportunities to accumulate impressions from the automotive landscape of modern Europe.

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New Trends In Far Eastern Management: Evil Knievel CEOs

Automotive News Europe [sub] spotted a new trend in Tokyo: Daredevil CEOs:

“On Nov. 27, Toyota boss Akio Toyoda wowed a crowd of spectators in Japan by racing through a lineup of Lexus LFA supercars in the new Toyota 86 sporty coupe. One day later, Honda CEO Takanobu Ito hopped on a Honda MotoGP racing motorcycle and blasted around the company’s Twin Ring Motegi racetrack.”

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Walking The Tokyo Motor Show With Nissan's Enfant Terrible, Part Deux

Yesterday, you had your private tour of the Tokyo Motor Show, and you could not find a more competent and entertaining tour guide than Nissan’s head designer Francois Bancon. (Officially, „Deputy Divisional GM for Product Strategy.”) The former Renault man has seen the world. He was a Frenchman of the first hour at Nissan.

If you want to see the Japanese market through European eyes, then please tag along for part deux of the tour, where Bancon talks about Suzuki, Honda, and Daimler. Listen closely to what Bancon says about Daimler. Renault/Nissan and Daimler have an alliance, and Bancon knows where it is heading

Executive summary for the video-impaired:

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Walking The Tokyo Motor Show With Nissan's Enfant Terrible

Checking out the competition has a great tradition at auto shows. Executives usually try to avoid doing it in front of rolling cameras. They don’t want to end up like Volkswagen’s Winterkorn, who immortalized himself in his “Da scheppert nix” candid camera video, while admiring the non-rattling steering column of the latest Hyundai.

Now imagine the dropped jaws at Nissan when the crew at Nissan’ Global Media Center floated the crazy idea to have their own walk around of the Tokyo Motor Show, and to – gasp – say good things about the competition?

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Roll Over, Nano: Renault Working On 2.500 Car

Renault already upset the European car market with its low cost Logan, which goes for around €7,700 (approx $10,000) in France. If the French newspaper La Tribune has its sources straight, then Renault could be coming out with a car that is priced like a high-end bicycle.

Renault allegedly is working on a car that will cost €2,500 ($3,350). France’s wire service Agence France Presse says it is not true, but la Tribune sticks to its guns and says that it maintains that its “proprietary information” is correct. According to TTAC’s proprietary information, AFP is wrong, and La Tribune is on the right track.

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PSA To Start Le Grande Firing

PSA Peugeot Citroen is planning an Opel-sized thinning of its French workforce, Reuters says, citing comments of Jean-Pierre Mercier, union representative at Peugeot’s factory in the Paris suburb of Seine-Saint Denis. The union claims that PSA wants cut 5,000 jobs. And guess who’s to blame?

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Ghosn To Announce Big Plans For Brazil Any Minute

In a press conference that is about to begin in a few minutes in Curitiba, Brazil, (see picture above), Nissan’s CEO Carlos Ghosn is expected to announce the expansion of an existing Renault plant, and the building of a new Nissan factory. And possibly even bigger news.

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Renault Electrifies French Government

Now that’s a nice sale: Renault sold 15,600 EVs that don’t even exist yet. In one fell swoop, Renault most likely overdelivered its near term business plan for electric vehicles in Europe. According to Reuters, Renault scooped up most of the 25,000 electric car contract awarded by the French government.

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What's Wrong With This Picture: French For "Outlander Sport" Edition
As a global vehicle, the Mitsubishi Outlander Sport is already something of a name-shifter. In Europe the compact crossover is called the ASX, and in Japan (…
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Daimler and Nissan-Renault Share Platforms, Batteries, Engines, Engineers

Dieter Zetsche and Carlos Ghosn had their intimate luncheon with selected members of the Fourth Estate today. It took place in the not so fancy, but highly convenient Maritim Hotel, which has a prized asset: A private entrance to the Frankfurt Motor Show. It, and the Marriott across the street, are the hottest properties in Frankfurt during Motor Show days. The TTAC-dispatched fly-on-the-wall reports from the luncheon:

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Ghosn & Zetsche: This Couple Is Expecting A Baby

Daimler and Nissan may announce some serious platform sharing, t.b.a. either today or tomorrow on the sidelines of the Frankfurt Motor Show. Bloomberg has heard that Daimler “is considering sharing its small-car platform with Nissan Motor Co.’s Infiniti brand.”

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What's Wrong With This Picture: Citroen Rescues The Van Edition
Citroen has been catching our eye of late with its “anti-retro” DS line, and the Tubik Concept looks likely to keep the trend rolling. Inspired b…
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Peugeot Imagines A Future In Which CUVs Don't Suck
Think “French Crossover” and you might picture something like the Peugeot Bipper Tepee: willfully weird, wildly named and highly functional in a…
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Au Revoir Vel Satis: Renault Promises To Make "Conservative" Luxury Cars

Having penned my own paean to the late, not-so-widely-lamented Renault Vel Satis after seeing its anodyne Korean replacement, I was somewhat heartened to find that I’m not the only auto writer with something of a weird crush on the strangest luxury car of our day. In the August issue of Evo Magazine, Richard Porter of Sniff Petrol dedicated an entire column [excerpted at vel-satis.org] to his inexplicable love for a car that he admits was

a hopeless old crock [from a time] when Renault’s quality control department couldn’t organise a tasting in a winery.

But, argues Porter, the Vel Satis has a unique appeal in the sense that it was

so self-consciously distanced from its dour German rivals that it was practically falling into La Rochelle Harbour

Whether Porter is genuine in is love for the Vel Satis or simply trolling famously elitist, performance-oriented readership is a question I’ll leave to the Best and Brightest. What is clear is that Porter’s weird love will not be recreated, as Auto Motor und Sport reports that Renault has learned its lesson and will be making “conservative” luxury cars in the future.

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Prince Of Monaco Gets Married In A Toyota

When you are the ruler of the Principality of Monaco, as tiny (and tony) as it may be, you don’t have to worry about any indigenous auto manufacture. And when you marry your lovely bride, you can pick any car you damn choose. For his upcoming nuptials with former South African Olympic swimmer Charlene Wittstock, Prince Albert of Monaco picked a Toyota.

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Pardon My French: The DS5 Is Here, Really
Remember how our man in Brazil became infatuated with the “anti-retro” Citroen DS line? Remember the DS5 pictures Herr Niedermeyer found? Well, h…
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Pfffft: The Air Escapes From The Big Nissan-Renault-AvtoVaz Takeover Story

Yesterday, The Nikkei was all worked up about a takeover of Russia’s largest automaker AvtoVaz by the Renault-Nissan Alliance. The Nikkei became so excited that it forgot simple logic. More on that here. The Nikkei had it on not so good authority that Nissan would soon buy 25 percent of the Russians, and together with Renault’s 25 percent and change, Japan and France would finally achieve what had been tried before: Rule Russia. We had our doubts.

Do you hear the big hissing sound? That’s the lukewarm air coming out of the story.

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Not True: "Nissan-Renault To Take Control Of Russia's AvtoVaz"

Rumors of Renault and Nissan taking over Russia’s AvtoVaz have been around for a while. We have a new one! The Nikkei [sub] picked up indications that Nissan and Renault will take a majority in AvtoVaz, Russia’s largest automaker. Except that The Nikkei doesn’t report it as a rumor. The headline “Nissan-Renault To Take Control Of Russia’s AvtoVaz” sounds quite definite. Sadly, it is not true.

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  • Ajla Those letters look like they are from AutoZone.
  • Analoggrotto Kia EV9 was voted the best vehicle in the world and this is the best TOYOTA can do? Nice try, next.
  • 3-On-The-Tree 4cyl as well.
  • Luke42 I want more information about Ford’s Project T3.The Silverado EV needs some competition beyond just the Rivian truck. The Cybertruck has missed the mark.The Cybertruck is special in that it’s the first time Tesla has introduced an uncompetitive EV. I hope the company learns from their mistakes. While Tesla is learning what they did wrong, I’ll be shopping to replace my GMC Sierra Hybrid with a Chevy, a Ford, or a Rivian — all while happily driving my Model Y.
  • 3-On-The-Tree I wished they wouldn’t go to the twin turbo V6. That’s why I bought a 2021 Tundra V8.