Car Makers in Europe form alliances to develop more efficient vehicles

More auto manufacturers, especially those in Europe, are going into collaborative projects to cut tail pipe emissions and other projects to improve vehicle performance. General Motors Co. and PSA Peugeot said that they are willing to open their European development and manufacturing alliance to more partners. BMW AG and Toyota Motor Corp. have also shown interest in expanding a fuel-cell collaboration and get into other projects to reduce vehicle weight. Peugeot and Robert Bosch GmbH have joined forces to develop technology to improve hybrid vehicle performance.
 
As countries raise their emission standards, there is much pressure on carmakers to intensify development of new technologies and push beyond the options now being offered by electric and hybrid vehicles. Much of the work involves more powerful batteries, multispeed transmissions, vehicle weight reduction and ways to make engines run more efficiently. Yet, because of persistent low sales in Europe, car manufacturers cannot fund development; forming alliances is one way of managing costs.
 
“What they have come to understand is if we are all working on the same things then why should we work on them separately,” said Barclays analyst Brian Johnson. “They don’t want to outsource transmission, engine or powertrain development so they need to find partners to make it cost effective. You also have more management open to these partnerships. Look for more targeted partnerships announcement in areas requiring high capital expenditures.” (January 25, 2013)