PSA Peugeot-Citroen Wants Greater Ties To BMW

REPORTS IN AUGUST suggested that PSA Peugeot-Citroen and BMW had been investigating opportunities to grow their existing partnership. This week, PSA boss Phillipe Varin confirmed his company's interest.

Varin confirmed on Monday that he is in talks with BMW CEO Norbert Reithofer to lock in purchasing and component deals, including transmissions and climate control systems.

Varin wants to offer BMW a new fuel-efficient three-cylinder engine scheduled for 2011, in exchange for the opportunity to buy larger engines from BMW.

BMW currently uses a pair of PSA-sourced diesel and petrol 1.6 litre engines in its MINI line-up, but co-operation between the two companies may expand in the near future if preliminary negotiations go well.

“We have set up groups of experts to work on deepening our cooperation on gasoline engines,” Mr Varin told German paper Handelsblatt this week.

BMW has indicated in the past that it will not entertain any merger possibilities, and Varin confirmed this week that PSA likewise has no plans to merge with another carmaker.

PSA plans to increase its component and platform alliances, allowing the carmaker to remain independent, while offering products in as many segments as possible.

The French carmaker currently shares two platforms with Fiat, one with Toyota and one with Mitsubishi.