PARIS, April 5 PSA Peugeot Citroen
will stop making larger diesel engines with Ford, the
companies said, a week after General Motors took a stake
in the French automaker to cement their planned alliance.
Peugeot and Ford will each develop their own engines to
replace diesels of 2 liters and above that they make together,
the companies said in a joint statement on Thursday. The two
automakers jointly develop and manufacture the bulk of their
diesel engines under a 12-year-old agreement.
Both automakers said the decision was unrelated to the
wide-ranging alliance between Peugeot and Ford's Detroit-based
"This decision has nothing whatsoever to do with GM," a
Peugeot spokesman said. "It is not linked to the alliance plan."
The larger engine category accounts for about a quarter of
the 3 million diesels that Peugeot produces with Ford each year
for both manufacturers' vehicle ranges. Smaller engines making
up the remaining majority are unaffected by the decision.
Announcing the planned GM alliance on Feb. 29, Peugeot had
vowed to continue and where possible expand its existing
partnerships, including the collaboration with Ford and a
similar petrol engine deal with BMW.
Ford finance chief Lewis Booth said at the time that the
U.S. automaker would study the implications of the GM-Peugeot
alliance for the diesel partnership.
Discussions on separating large diesel development "were
taking place before the GM-Peugeot alliance was announced and
were based on differing product needs", a Ford spokesman said,
declining to elaborate.
In a March 8 interview with French financial daily Les
Echos, Ford Chief Executive Alan Mulally had suggested that
joint diesel production with Peugeot would continue in full.
"I don't foresee any change to our agreements, which are
beneficial to both parties," Mulally told the French financial
GM acquired a 7 percent stake in Peugeot as part of a 1
billion euro ($1.3 billion) capital increase by Europe's
second-biggest automaker that settled on March 29.