PSA Peugeot-Citroen recently finalized a deal with Mitsubishi Motors Corp. involving an electric car project slated for production in 2011.  The deal involves both Peugeot and Citroen receiving their own electric vehicles based off of the Mitsubishi i-MiEV.  However, many now believe that the initial electric car project is a sign of much more collaboration to come between the two companies.

According to La Tribune, a French newspaper, sources close to the PSA-Mitsubishi project believe that PSA is seeking a full scale alliance with Mitsubishi.  They also reference the fact that the announcement of the electric car project came with both Mitsubishi CEO Osamu Masuko and PSA CEO Phillipe Varin side by side on the stages.

What interest would PSA have in Mitsubishi aside from electric vehicle technology?  La Tribune reports that PSA CEO Varin goals, as set by the Peugeot family, includes achieving alliances that will allow the company to reduce their development costs and expand their global reach.

Varin said, "PSA's management is too Eurocentric and the company has to become more global, yet must remain independent."  His statement suggests that the company does not want a merger, yet sees the need for alliances with other automakers.

PSA and Mitsubishi have worked together on several projects including the Peugeot 4007 and Citroen C-Crosser, both based on the Mitsubishi Outlander.  The two companies are also working on a factory in Russia that is expected to build CUVs and PSA cars.

Mitsubishi's previous ventures with other companies have not met with success.  Both Chrysler and Daimler AG had a vested interest in the company before both backed out of the deal, leaving Mitsubishi behind.

But investors and analysts believe a PSA-Mitsubishi alliance would make sense.  Mitsubishi could provide electric vehicle knowledge, SUVs and truck to PSA in return for small car platforms that Mitsubishi could utilize for upcoming hybrid or electric vehicles.

Both companies are suffering financially and must make a turn around soon to succeed in the industry.  An alliance may just be the answer.

Source:  Wards Auto (Login required)