PSA Walks Away From Proton, Chrysler

GENEVA — PSA Peugeot Citroën has withdrawn from negotiations to acquire or form an alliance with troubled Malaysian automaker Proton, which owns Lotus. Further, PSA executives say they are not interested in acquiring the Chrysler Group from DaimlerChrysler, throwing more cold water on speculation that the French carmaker might be planning a return to North America.

In a media session at the Geneva auto show, PSA Chief Executive Christian Streiff said the company does not "have time" to look at Chrysler while it is focused on improving profits and quality. "To launch [a bid] now would be such a distraction of effort that it isn't possible," Strieff told reporters. "I do not think we will conclude another industrial alliance."

The company announced Monday that it was breaking off talks with Proton after more than six months of discussions about a possible alliance or acquisition, including a feasibility study on joint production and platform-sharing in Malaysia. An official statement said: "An in-depth study of the automobile market and the economic conditions for co-producing vehicles with Proton concluded that the conditions for the project's success were not present. PSA Peugeot Citroën has informed Proton of its decision not to follow up on the study."

PSA continues to support a number of alliances around the globe, with such automakers as BMW, Dongfeng, Ford, Fiat, Mitsubishi and Toyota.

Proton, meanwhile, continues to discuss the possibility of a tie-up with Volkswagen, but local press reports from Kuala Lumpur say the talks are not going well. VW reportedly wants to control local manufacturing operations, but does not want to take a majority interest in the parent company, which currently is controlled by the Malaysian government.

General Motors also has expressed an interest in Proton, but the nature and status of that interest are unknown.

© Source: article on insideline
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