September 3, 2013 / 7:31 PM / 4 years ago

Peugeot, BMW seen ending engine partnership: report

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An employee works at the third factory of Dongfeng Peugeot Citroen Automobile company, after its inauguration ceremony, in Wuhan, July 2, 2013.China Daily

PARIS (Reuters) - European carmakers PSA Peugeot Citroen (PEUP.PA) and BMW (BMWG.DE) have decided against extending their partnership on small petrol engines after it expires in 2016, Les said on Tuesday, citing a source close to the German carmaker.

A spokesman for PSA however told Reuters: "The cooperation is alive and runs until 2016. There has been no communication at this stage on (what happens) after 2016."

BMW was not immediately available for comment but its chief executive, Norbert Reithofer, has said in the past it no longer needed PSA's help on motors since it was developing its own scalable engine architecture for three, four and six-cylinder petrol and diesel engines that would keep costs low.

PSA has been scaling down partnerships with other carmakers since its alliance with General Motors (GM.N).

"Since PSA launched itself into its alliance with GM ... the industrial logics have diverged," Les Echos cited a source close to BMW as saying.

Reporting by Dominique Vidalon, additional reporting Cyril Altmeyer in Paris and Christiaan Hetzner in Frankfurt; editing by David Evans

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