Mediaboss Marketing

GENEVA (AP) Alliances are the buzz word of European automakers' struggle for survival.

PSA Peugeot-Citroen chairman Philippe Varin said Wednesday at the Geneva Motor Show that a new alliance with General Motors will allow the French automaker to return to long-term profitability in Europe.

There is hardly a potential ally that Fiat and Chrysler CEO Sergio Marchionne will rule out.

"We are open to everything," Marchionne said, even as the fresh GM-Peugeot alliance complicates Fiat's search for potential new partners.

While alliances have been around for a while some more successful than others the brutal European car market characterized by plummeting sales, idled factories and fierce competition is pushing many automakers to look for partners for new technology and access to fresh markets without reinventing the wheel.

Industrial tie-ups are becoming even more urgent as the European market continues to contract. Sales were down 200,000 units, or 9 percent, in the first two months of the year, and the car market has lost some 2.5 million vehicle sales from its peak in 2006-07, according to figures from IHS Automotive.

"This requires more and more investment that nobody can do except through acquisitions and alliances," said Carlos Ghosn, head of the 13-year-old Nissan and Renault alliance. "If Nissan were alone and Renault were alone there were many things we could not do."

Targeted alliances are driven by the logic that a good four-cylinder engine is a good four-cylinder no matter who builds it, and no driver cares about what platform the car is on. Only when it comes to more powerful engines, does brand identity come into play. Maserati and Ferrari, for example, strictly restrict their powertrain technologies to those brands.

The Peugeot-GM alliance is somewhat broader. GM becomes the French automaker's second-largest shareholder with a 7-percent stake, behind the Peugeot family, whose stake drops from 31 percent to around 25 percent.

"It represents an opportunity to build a strong and more profitable business not just in Europe, but in other parts of the world," Varins said, allowing Peugeot to address tightening emissions targets in Europe and strengthen its position in emerging markets in a way not economically feasible on its own.

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Auto alliances the buzz word for survival