PSA/Peugeot-Citroen has suspended development of a low-cost car for emerging markets while it discusses expanding its alliance with General Motors Co. to cover more vehicle categories and technologies.
Plans to build the car at PSA's plant in Madrid, Spain, have been suspended indefinitely, the automaker said on Friday.
PSA is also suspending for seven months development of a dual-clutch transmission due to appear in Peugeot and Citroen cars next year as part of the company's expansion of fuel-saving technologies.
"More cost-effective pathways will be explored, in particular through the GM alliance, to provide the group with this type of gearbox," PSA said.
The French automaker said it may share with GM development of larger vehicles, dual-clutch transmissions and a compact car for emerging markets including Latin America. The projects would be in addition to pooled development and production of subcompacts and mid-sized cars, announced last month.
The Peugeot brand had planned to launch a low-cost compact notchback sedan next year code-named M3 to compete against Renault's no-frills Logan and targeted at developing markets in eastern Europe, China, North Africa and Latin America.