GM-PSA to announce purchasing pact soon

SAO PAULO Sun Oct 21, 2012 6:45pm EDT

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SAO PAULO (Reuters) - General Motors Co (GM.N) and PSA Peugeot Citroen (PEUP.PA) will announce their joint purchasing agreement soon, though they have no immediate plans to build cars together in Brazil, GM executives said on Sunday.

"So far the entire focus of the alliance has been Europe and I expect that to continue for some time," GM's South America chief Jaime Ardila told reporters at an event ahead of the Sao Paulo Auto Show's media preview.

Last month, French and Brazilian union officials said PSA Peugeot Citroen and GM were working on plans to build small cars together in Brazil. Under the tentative plan, the allied automakers would pool production of two new models for Peugeot Citroen and two for GM. No decision had been made on a production site, union officials said. <ID: nL5E8KPADM>

Under their alliance announced in February, in which GM took a 7 percent stake in Peugeot, the two car makers aim to save $2 billion annually within five years from purchasing, logistics, and joint development of new vehicles and technologies.

Referring to the purchasing agreement, in which both companies pool purchasing as a way to cut costs, GM Chief Executive Dan Akerson told reporters on Sunday: "There will be announcements later this month, early next month on that."

Akerson called bringing GM's Cadillac luxury brand to South America in the next five years a "possibility."

Ardila said he still sees the South American region being profitable for the company this year and reiterated that GM sees sales in the region reaching 1.5 million vehicles a year by 2015.

Akerson added that the U.S. automaker remains "cautiously optimistic" about vehicle demand in China, where it is the market leader. He said GM has gained market share, which he said the company now estimates to be about 15 percent.

(Reporting by Ben Klayman; Writing by Asher Levine; Editing by Diane Craft)

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