PSA Peugeot Citroen told Reuters it is not true that it is low on cash, and that it needs to ask shareholders for an infusion. France’s La Tribune says that Peugeot is looking at a capital raise after burning through 2.5 billion euros ($3.23 billion) of cash in the past year.

The EU is very stingy when it comes to financial support for its automakers, and it prohibits most monetary assistance given by EU states to their industries. Of course, there are exceptions, and one such exception makes possible a $516 million loan to Renault.

The situation in Europe is so desperate that a 5.2 percent drop of French car sales in April gave reason to rejoice. “The plunge seems to be halting after the double-digit declines of previous months,” Francois Roudier, spokesman of the French CCFA industry association, told Reuters.

Folks who are not intimately familiar with the peculiarities of the European auto industry often call Renault a similar basket case as its French rival Peugeot. January through March, both are down in Europe, PSA (-15.3 percent) more than Renault (-8.3 percent), but the big difference is that Renault has a much wider international footprint. What’s more, Renault owns 44.3 percent of Nissan. This international footprint helps Renault solve problems in ways Peugeot can’t touch. For instance, by making Nissans.

The French government is planning on raising taxes on diesel fuel, branding it a “health issue”, much to the chagrin of consumers and the country’s auto industry.

Prevailing wisdom today holds that small cars, manufactured in developed economies are some of the least profitable cars in existence. So why do companies like Peugeot, Citroen and Renault persist in producing them?

After approving a $1.6 billion loan guarantee for PSA’s captive finance arm, the European Commission demanded a restructuring plan for all of PSA within six months.

The French government is denying that it plans to acquire a stake in PSA, but France’s Prime Minister told reporters that mechanisms for providing government assistance have already been vetted.

If GM wants to know what will happen when things get tough at its Opel plants, all it has to do is ask partner PSA. Workers at PSA’s doomed Aulnay plant “face jeers and threats, as well as eggs and other objects hurled by striking colleagues protesting against the shutdown and Peugeot’s restructuring plans,” as Reuters reports from the frontlines.

If anyone is hoping for a turn-around of the European car market, be it Opel, PSA, or Pch101, January definitely was not the month it happened. Some people, who get paid a lot of money for a very long-term vision, believe we have to wait years for the turn-around. The French car market dropped 15 percent in January, with “Volkswagen and U.S. carmakers leading the drop ,” Reuters reports. Massive sales subsidies of 2,000 euros ($2,700) per car, reintroduced in October in Spain, could not reverse the Spanish market. It dropped 9.6 percent.

GM’s tattered alliance-partner PSA Peugeot Citroen did not produce any cars in its Slovak plant today and will add more stoppage days next month to catch up with weak demand in Europe, Reuters reports.

We at TTAC are very excited by modular platforms, and it has nothing to do with undiagnosed autism spectrum disorders or a lack of interest in the wider world outside autos. Modular platforms are the next great leap forward for auto makers; green cars help save cute animals, and thus get all the attention, but guess what underpins the Nissan Leaf? A version of Renault-Nissan’s B Platform, which underpins everything from the Cube to the Clio to the Sandero.

The French government is asking the EU Commission to approve its bail-out of GM’s alliance partner PSA Peugeot Citroen, Reuters says with input from French daily Les Echos.

What a sexy bride! A year ago, GM acquired seven percent in moribund PSA. A year later, PSA announces truly horrific results. PSA’s global car sales dropped 16.5 percent for the year. Its market share in Europe is down 0.5 points to 12.7 percent. There is a big black hole where there used to be a profitable Iran business.

The French government is pushing PSA Peugeot Citroen to buy Opel, says Le Monde, which claims to have its information from sources at the French Finance Ministry and in the entourage of France’s President Francois Hollande. Buying moribund Opel would allow PSA to stand up to “ogre Volkswagen” which “has chosen to eliminate PSA,” as an informant told the Paris paper.

We did not believe that EU regulators would let France’s government bailout of GM’s alliance partner PSA skate through unchallenged. State aid to companies is against EU rules, and refinancing of Banque PSA Finance is state aid EU Competition Commissioner Joaquin Almunia wrote in a letter to the French government. This according to a report in the French daily Les Echos.

Those mysterious gas engines of course are gasoline-fed “three-cylinder engines, designed to comply with Euro VII emissions standards entering force around 2019,” says Reuters. The wire heard from Peugeot that the engines “will bring big savings for both partners.” Further details were not given.

The alliance between GM and PSA is beginning to show concrete results – not just yet, but at least they decided to work on them. In a joint press release, GM and PSA announced that they will jointly work on what they call “three common vehicle platform development projects.” Meaning cars. Finally.

The fate of PSA and the Algerian people has been intertwined for decades. The group’s Aulnay plant, which is due to close, was originally staffed by immigrants from North Africa, lured by the promise of a better life and secure jobs in France. And while Peugeot sales withered in France, the brand has been traditionally strong in North Africa, with 2011 bringing a 93 percent increase in sales for Peugeot.

But Algeria’s push for a domestic car industry doesn’t seem to include PSA. Arch-rival Renault is due to set up a factory in the country, but PSA has apparently rejected overtures from the French government to take a stake in the ailing car maker.

Last week, when talking about Volkswagen’s future $10,00o low-cost car, we said that “is rumored to work on something that costs about half.” Guess it is no longer a rumor. Reuters writes that Gerard Detourbet , the man behind Renault’s Logan program, is in Chennai, India, to work on a real budget car, costing about half of Volkswagen’s targeted price. India is the battlefield for low-cost cars. And that’s not because of Tata’s Nano.

Peugeot is deepening job cuts at its French factories, with another 1,500 positions set to be made redundant as part of a massive cost-cutting effort. Meanwhile, rival automaker Renault is expanding its operations in Morocco as its Dacia brand continues to steamroll through the European market.

Peugeot will eliminate an additional 1,500 French jobs by 2014, bringing the previously announced 8,000 layoffs close to 10,000, PSA managers told union representatives yesterday.

With the stroke of a few pens putting signatures under a contract in Moscow today, then Renault-Nissan Alliance has become Russia’s largest automaker. The Alliance took control of AVTOVAZ, maker of the market-leading Lada brand. Lada holds 30 percent of Russia’s rapidly growing car market.

Despite being attacked in some circles as symbols of American decadance, the compact crossover is rapidly gaining in popularity. French business outlet La Tribune reports that sales of small crossovers are up 25 percent this year, with crossovers of all sizes now accounting for 10 percent of the car market.

Next up in the “we couldn’t make this shit up” category – PSA and Citroen were hit by strikes after workers were called out for being unproductive.

China Business News has the story (via Reuters) that Renault will start a joint venture with Dongfeng, and that “the two firms plan to invest a combined 6.5 billion yuan ($1.0 billion) in a plant in the central province of Hubei with an initial capacity of 200,000 cars a year.” The story promptly went as viral as a story about a Chinese joint venture can go viral.

Officially, the story elicited a “no comment”at Renault. Privately, after they were done yawning, contacts in Paris said that this is a non-story, but a popular one. News about a joint venture between Renault and Dongfeng appear with regularity, but they overlook the fact that Renault has had a joint venture in China for longer than most people seem to remember.

Ah, those French! With their alliance with GM on les rocks, PSA is casting about for a new partner, just in case “the co-operation with GM and Opel should fail,” writes Germany’s Manager Magazin. PSA and Tata already had first talks, the usually well connected German business magazine says.

A while ago, I chatted with an industry executive who had “done time” (his words) at GM. I asked him how that was, and he said: “There is always that talk about the current Big Deal that will bring the company back to its former glory. When that Big Deal fizzles, it’s on to the next Big Deal.” A formerly Big Deal is fizzling in Europe.

As we reported yesterday, General Motors and PSA have put the brakes on a broader alliance. Allegedly after PSA accepted financial assistance from the French government, as Reuters says, which broke the story. GM’s stock price immediately changed course southwards, because the consequences can be enormous..

Renault opened negotiations on a new labor deal for France with a big squeeze, Reuters reports. Renault wants pay and working time concessions from its French workers. If Renault doesn’t get a good deal, jobs could go elsewhere.

For a while, TTAC has been following rumors that Renault may be reviving is storied Alpine brand. Renault will do it, together with another motor celebrity, Caterham.

Renault shows a facelifted Fluence at the Istanbul Motor Show, November 2-11, 2012. The car receives a new 1.6 16V 115 hp gasoline engine mated to a likewise new X-Tronic CVT.

Stephen Odell, CEO of Ford Europe, thinks that state aid of ailing carmakers is a dead-end street.

Odell told Reuters:

Europe’s second-largest automaker and GM alliance partner PSA Peugeot-Citroen is being saved from the brink for the time being. PSA is putting the final touches on an agreement with creditor banks on 11.5 billion euros ($14.9 billion) of refinancing, in addition to 7 billion euro ($9 billion) in government guarantees for its captive financing arm Banque PSA Finance, Reuters says.

After a lot of he loves me, he loves me not, GM and Peugeot PSA finally took their fledgling 7 percent relationship a few concrete steps forward. At least on paper. GM and PSA will not just buy new parts together. They will share platforms, the key to make joint purchasing work. The timing of this announcement, coinciding with a bailout by the French government, however is a bit unfortunate.

The French government will provide multi-billion euro guarantees to GM’s alliance-partner PSA Peugeot-Citroen via PSA’s banking arm, Reuters says. Don’t bet on it happening: There is already opposition from Germany, and wait until Brussels officially hears of the deal.

The EU sent a warning shot across the bow of protectionist France. Brussels refused France’s request to monitor car imports from South Korea. According to the Wall Street Journal, import surveillance could have been Europe’s first step toward blocking or reversing tariff cuts instated by a free trade deal between the EU and Korea.

Tomorrow, GM’s sick French partner PSA Peugeot Citroen will publish quarterly sales. They are expected to be très dégoûtant, and will set off a chain reaction: The credit rating agencies will put PSA’s already alarming rating down a notch further to near-dead status. Its captive financing arm BPF, a bank in its own right, will go down with the mothership. The bank’s rating is not allowed to stay more than two notches above the parent. This will drag the bank into junk bond territory, and borrowing costs will explode. The French government is here to help – for a price.

The great October surprise announcement of progress at GM’s Opel front is turning into an October letdown. What will be announced “this month, early next month” will be a joint purchasing agreement between GM and 7 percent partner PSA Peugeot Citroen, GM CEO Dan Akerson told Reuters ahead of the Sao Paulo Auto Show’s media preview. In the industry, the joint purchasing agreement is seen as a non-event.

“When you do everything right but too late, you do it all wrong. Before reaching a dead end, PSA decided to forge a partnership with a manufacturer [General Motors] that I don’t consider to be among the industry’s leaders of the pack. Overall, I think there is a lack of ambition [when it comes to product] from the French manufacturers.”

– Thierry Morin, former CEO of Valeo

Yesterday, La Tribune in Paris had it on good authority that moribund Opel and the carmaking arm of PSA Peugeot Citroen would be merged into a joint venture.Reuters started digging a bit deeper and can say with conviction that “General Motors and PSA Peugeot Citroen are exploring ways to combine European operations in a second phase of the carmaking alliance they forged to save costs earlier this year.” They just don’t know yet how.

Think of it as a merger of the equally sick: PSA’s automotive division (Peugeot Citroen) and Opel could be put into one company, a joint venture between GM and PSA, La Tribune reports with Reuters providing the translation.

Carmakers do get hurt when someone calls their cars junk. When Moody’s calls your credit rating junk, then this hurts a lot: It makes financing more expensive, or possibly impossible. Moody’s lowered the credit rating of Fiat and PSA Citroen Peugeot to Ba3 with negative outlook. Translation: This is serious junk, and it might get worse.

Around 1,000 people tried to break through a security cordon around the Paris Auto Show (29 Sept. – 14 Oct.) today, throwing eggs and flour. The police answered with tear gas. It wasn’t an attempt to see the cars. It was a demonstration against lost jobs, and against the new Socialist government.

Renault wants to shift more production away from France, French union sources leaked to Reuters, and to maximize the disgrace, the jobs will go to Turkey, a country not in high regard in islamophobic French circles. Renault plans to build more than 70 percent of its Clio subcompacts in Turkey, the union sources said. Renault issued a weak denial that reads like a confirmation.

Renault is playing hardball in France. Message to government and unions: We can make our cars elsewhere. After Renault CEO Carlos Ghosn said last Friday that Renault could disappear from France “in its current form,” his Chief Operating Officer Carlos Tavares said that production in other countries could be cheaper.

Reporters of Reuters, roaming the floors of the doom-dominated Paris Auto Show, finally found a feel-good trend: Green supercars, or make that guilt-free kickass swank, targeted at cash-positive crisis-sated, climate-conscious consumers .

McLaren shows the P1 concept at the Paris Motor Show. Due to budgetary constraints, we had to outsource the video to India, and leave the reporting to Ireland’s Student News, which reports:

Renault chief Carlos Ghosn said in a radio interview with RTL that his company could leave France if it is unable to compete at home. Asked if Renault could disappear, Ghosn said: “In its current form, yes.”

TTAC readers who followed our past reporting on the developing relationship between Daimler and the Renault/Nissan Alliance will not be surprised in hearing what Carlos Ghosn and Dieter Zetsche told the press today. If you think you’ve heard it all before, you are right. You did here.

GM’s Susan Docherty, who is in charge of Chevrolet Europe, is shocked by GM alliance partner PSA Peugeot Citroen. PSA, along with Fiat, are producing “very scary numbers” with discounts of as much as 30 percent off gross sale prices, Docherty told Bloomberg. Opel’s numbers can be even scarier.

European auto sales likely will fall 8 percent this year, Renault/Nissan CEO Carlos Ghosn told Reuters today in Paris. Should some industry leaders be hoping for government help, then Ghosn has bad news for them. There is “zero chance” for a government-led restructuring of Europe’s auto industry. ” Every company is going to have to deal with its own problems,” Ghosn said.

I drive an American car forum member’s fantasy: a stick-shift diesel wagon. Except that I don’t. I love that car, but it stays in its garage most of the time, unlike its predecessor in New Jersey, which I drove 60 miles a day plus 200 on weekends.

It’s official. France’s PSA Peugeot Citroen is “in a difficult situation,” says a government-commissioned report into PSA’s financial situation. The report comes to the conclusion, says Reuters, that the company cannot be saved by cost cutting alone, and that ”job cuts must not hurt its research and development capabilities.” While the report does not make recommendations on how else the company is to be saved, it pretty much smells like bailout à la française.

Bad day for PSA and by association partner GM: PSA Peugeot Citroen will be dropped from France’s CAC 40 blue chip stock index, market operator NYSE Euronext told Reuters. To add insult to injury, the former blue chip will be replaced by a Belgian company, chemicals group Solvay.

People in Europe had a lot of time to think about their troubled future during their long vacation. Coming back to work, they are “ready to shut plants and lay off staff,” as Reuters observes. Executives and union leaders are said to be in rare agreement over who to emulate: Obama, the UAW, and Detroit. Europeans want their bailout too. Some do, at least.

The united Europe is more and more turning into a divided Europe, at least when it comes to making cars. On one side are the hugely profitable German carmakers Volkswagen, BMW, Daimler and Porsche. On the other side are its loss-making or barely-profitable rivals including Fiat, Peugeot-Citroen, Renault and GM’s Opel. Now, the split drives the two countries apart that started Europe’s unification, France and Germany.

France’s new socialist government wants to punish buyers of bigger cars with huge taxes while lifting the tax burden on smaller cars. The bigger cars are mostly German.

Bailing out a European carmaker in need is sure to attract the attention and ire of a few EU Commissars. Once people are in the street, money can legally flow.

While in Detroit the leaking remains limited to gossip and innuendo, Opel in Germany sprung a Deepwater Horizon–sized leak that could pollute the political landscape for years. The Frankfurter Allgemeine Zeitung says it is in possession of something that is regarded as part of the crown jewels of a car company: The long-term production plan through the next decade. It’s bad enough that a paper publishes closely guarded secrets – their publication could blow-up the plan.

In 2010, when everybody was going ecstatic about EVs, PSA Peugeot Citroen said to Mitsubishi: “send us some of your i-Mievs, with our badges. Say, 100,000 for starters.”

PSA sold them (as much as they could) as the Peugeot iOn and Citroen C-Zero, the first car that sounds like sugar-free soda-pop. Now, PSA picked up the phone, called Japan, and said: “Hold the i-Mievs! We have enough!”