Peugeot accelerates after alliance talks with GM

Shares in PSA Peugeot Citroen, the No 2 car maker in Europe, surged yesterday on news that it was discussing an alliance with General Motors of the US, which could include the two companies taking stakes in each other.

A deal is aimed at unlocking cost savings for both companies, which have been dealing with financial losses across the Continent. GM owns Vauxhall in the UK and Opel, and said last week that it planned to announce a restructuring of its European operations in the next few months.

Peugeot, which reported a cash outflow of €1.65bn (£1.4bn) for 2011, and GM would share technology and jointly develop components for future models, if the strategic alliance is sealed.