Malcolm Flynn | Dec 21, 2012

General Motors and PSA Peugeot Citroen have reportedly cancelled plans for a mid-sized platform project, announced as part of a wider alliance in March.

Industry paper Automotive News Europe reports the GM/PSA alliance is well and truly alive however, with other model projects still on track and a new engine development program added to the arrangement.

Described by a PSA spokesman as "the alliance taking form and moving up a gear," the new engine program will involve both parties developing new three-cylinder engines for use across all mutual brands.

These engines are expected to be an evolution of the EB-series 1.0 and 1.2 litre units recently debuted in the Peugeot 208 light car and will comply with Euro VII emissions regulations expected in 2019.

The canned mid-size models would have seen future Opel/Vauxhall Insignia models share componentry with future Peugeot 508 and Citroen C5 models, but this element of the alliance reportedly failed to form a convincing business case.

The report adds that the doubtful viability of producing the C5 in Rennes, Western France at the same time as the Insignia in Ruesselsheim, Germany was likely to cause political friction between the two nations.

If production were to be shifted from one of those facilities, neither country would be likely to relinquish production during the European economy’s current depressed state.

Other elements of the initial plan that have previously fallen by the wayside include the development of a mutual small car for Latin America, and a dual-clutch transmission project.

Remaining GM/PSA alliance projects include a small Peugeot crossover to share its platform with a small Opel/Vauxhall MPV (future Zafira), along with a light MPV and upgraded light hatch (future 208/Corsa) platform for both PSA and GM.

Despite this platform sharing among brands, Automotive News Europe reports that each model will be differentiated sufficiently to maintain their respective brand characteristics.

GM and PSA are yet to confirm if this program change will affect GM’s planned seven percent equity investment in PSA or the estimated $2 billion annual cost saving between the two entities.

Either way, the first new models to be borne from the alliance are still expected in 2016.