Paris: French carmaker PSA Peugeot Citroen and Japan’s Mitsubishi Motors Corp. on Wednesday ruled out a capital tie-up after a meeting at the Geneva Auto Show.
In a joint statement, the two car markers said Peugeot Citroen CEO Philippe Varin and Mitsubishi Motors president Osamu Masuko met on Tuesday and decided that a capital alliance “was not appropriate in the current circumstances.”
But they said they want to broaden the existing cooperation between the two companies.
In December the car makers said they were in talks that could lead to a “strategic partnership.”
That announcement came after a report in Japan’s Nikkei business daily last year which said that the two car makers were in the final stages of capital tie-up talks with Peugeot Citroen looking to buy a 30 to 50% stake in Japan’s No. 4 automaker.
Varin has repeatedly said that partnerships or acquisitions could be possible provided Peugeot Citroen remains independent and the add-ons provide real benefits and fit with the overall strategy.
Peugeot Citroen spokesman Hugues Dufour said the two CEOs decided that “current uncertainty about the economy and markets” meant that the second condition — creating shareholder value — could not be met.
Peugeot Citroen has already worked with Mitsubishi on product development with cooperation on 4x4 vehicles, clean technologies with electric vehicles and a joint venture in Russia.
Mitsubishi had formed a capital tie-up with DaimlerChrysler AG, which held a 37.3% stake in the Japanese automaker. But DaimlerChrysler sold the entire stake in Mitsubishi in 2005, ending the tie-up.
In early trading in Paris, PSA Peugeot Citroen shares were little changed on the news, rising 0.2% to €20.23. In Tokyo shares of Mitsubishi Motors Corp. closed at ¥132, up 0.8%.