BMW and Peugeot Citroën expand co-operation into hybrid technologies

50-50 joint venture will begin operations in the second quarter of 2011.

February 4, 2011
by Canadian Automotive Review staff

Munich/Paris: The BMW Group and PSA Peugeot Citroën are expanding their collaboration on hybrid systems by signing an agreement to set up a 50-50 equity joint venture named BMW Peugeot Citroën Electrification. The agreement was signed on February 1st. In October 2010, the two companies had signed a Memorandum of Understanding designed to expand their existing co-operation to hybrid systems.

BMW Peugeot Citroën Electrification will focus on developing and producing hybrid components, including battery packs, E-machines, generators, power electronics and chargers, while also developing software for hybrid systems. Joint research and development, production and component purchasing will leverage significant economies of scale for both companies.

The initiative aims to develop standard hybrid components for the electrification of the two companies’ vehicle ranges. Its goal is also to create an open European platform on those technologies that will help the European industry to structure itself in the field of hybridization. To that extent, the joint venture will both integrate suppliers by outsourcing development work and could sell hybrid components to other companies besides its two shareholders.

Subject to approval by the relevant competition authorities, the joint venture is expected to launch its operations in the second quarter of 2011. The new hybrid components will equip both partners’ vehicles from 2014 onwards.

The joint venture’s management, as well as the rest of its workforce, will be drawn from both companies. Additional external staff will also be hired. The key management positions will be equally shared among the two companies. Wolfgang Güllich, currently responsible for BMW Group’s Purchasing Strategy, will be appointed CEO of BMW Peugeot Citroën Electrification, and Jean Leflour, currently direcctor customer satisfaction and quality planning at PSA Peugeot Citroën, will be appointed managing director.

The BMW Group and PSA Peugeot Citroën have been cooperating on engines for several years, building together more than 1.8 million units from 2006 to 2010. In February 2010, the two companies agreed to develop the next generation of their jointly designed 4-cylinder petrol engine, which will also meet EU 6 requirements. The joint engine is currently built into a number of MINI, Peugeot and Citroën brand models.