If you’re in the business of making and selling cars, which market you primarily operate in can make all the difference. For France's Peugeot, that market is primarily Europe, while GM on the other hand, has operations right across the globe. This difference has become bad news for Peugeot, as Europeans simply haven't been buying cars. It's also been bad news for GM - but success in other markets around the globe has meant the American giant is in the black for 2011, while Peugeot is in the red.
Given these facts, it might seem a little odd that the two auto makers are, according to the French labour minister, considering a partnership. While noises from GM and Peugeot have been far more subdued, it does appear that the two brands may be planning to pool resources against the backdrop of tough economic conditions. Reports in French and British newspapers have also been commenting on the possibility of a partnership, with suggestions that an announcement could be made at the Geneva car show at the beginning of March.
With Europeans unlikely to start buying cars in great numbers very soon, Peugeot need the commercial equivalent of a vehicle recovery provider and GM may be just that partner. The only obstacle might be getting a deal agreed; the Peugeot family still controls 30% of the company’s shares, equating to 48.3% of voting rights because of the way the shares are structured.
Motor commentators around the globe will be keen to see if a deal materialises.