Sixth largest

Peugeot is in talks about an alliance with Mitsubishi

The French concern PSA Peugeot Citroen, Europe's second largest automaker, has begun negotiations on a strategic partnership with the Japanese Mitsubishi Motors Corp. As reported yesterday by Bloomberg, Peugeot intends to acquire between 30 and 50% of the Japanese company's shares, which will lead to the creation of the sixth largest alliance in the global automotive industry. Issues of joint development of all-wheel drive vehicles, electric vehicles and a joint venture between Peugeot and Mitsubishi in Russia are also being discussed. The final execution of the transaction can be completed in June 2010, when the annual meeting of Mitsubishi shareholders will take place. This news has already affected the quotes of the Japanese company: yesterday shares of Mitsubishi Motors soared by 17% - to the highest value in the last 14 months.

Mitsubishi has been looking for a partnership with a foreign company for several years. In 2000-2001, the German-American DaimlerChrysler AG acquired a 37% stake in the Japanese automaker, but in 2004, after Mitsubishi's debts exceeded 1.14 trillion yen, it refused to participate in its rescue and subsequently sold its stake in Mitsubishi. The cooperation between Peugeot Citroen and Mitsubishi also has its own history. It began in 2005, when automakers reached an agreement on the production and sale of two French cars in Europe: Peugeot 4007 and Citroen C-Crosser, produced on the basis of the Mitsubishi Outlander. Currently, Peugeot is receiving technology for creating electric vehicles from Mitsubishi Motors, and the corporations are preparing to begin joint production in the Kaluga region. As Peugeot Russia CEO Francois Poirier told reporters yesterday, Peugeot-Citroen is accelerating the launch of its first plant in Russia, wanting to expand its presence in the country. Investments in the plant will amount to 300 million euros, and its design capacity is 100 thousand cars per year. According to Mr. Poirier, the first car to roll off the assembly line at the plant in Kaluga in the spring of 2010 will be the Peugeot 308. According to him, 20 thousand cars of this model will be produced in Russia in 2010. Russia, according to Mr. Poirier, is the company's priority market. If in 2008 Peugeot's share in the Russian market was 1.6%, then at the end of November 2009 it increased to 2.1%.

In the world, the French automaker currently ranks eighth, Mitsubishi Motors is 15th. But if the companies manage to unite, the Peugeot-Mitsubishi alliance will take sixth position in the world ranking in terms of vehicle production, behind only Toyota, GM, Volkswagen, Renault-Nissan and Ford.

This is not the only upcoming alliance in the global automotive market. Yesterday it became known that the German auto giant Volkswagen, continuing the process of unification, plans to become the owner of 49.9% of the shares of the Porsche automaker worth 3.9 billion euros as early as next week. “We are now starting a new chapter in the history of Volkswagen and Porsche. I am deeply convinced that together we can write a history of economic recovery that has been few and far between in the automotive world,” Martin Winterkorn, chairman of the board of the company, said yesterday at an extraordinary meeting of Volkswagen shareholders in Hamburg. As is known, related companies have been discussing the issue of merger for quite some time and the process of their merger should be completed by 2011. As a result, Porsche will become the ninth automobile brand of the Volkswagen concern (in addition to cars of the same name, the concern owns brands such as Bentley, Bugatti, Lamborghini, Audi, Skoda, Seat and Scania). And according to Mr. Winterkorn, the purchase of Porsche will increase the group’s operating revenue by 700 million euros per year.

Irina TSYRULEVA