In order to reduce supply costs, BMW and PSA/Peugeot-Citroen are putting up a joint venture to develop and build hybrid-power components and software.
In a joint statement, it was revealed that the 50-50 partnership will be named BMW Peugeot Citroen Electrification. Operations will start in the second quarter and production of the parts for both manufacturers' vehicles will begin in 2014.
Jean Leflour, chief of customer satisfaction at PSA, said that Wolfgang Guellich, BMW's head of purchasing strategy, will head the project.
In this statement, BMW CEO Norbert Reithofer said that with this venture, they will be able to “achieve significant economies of scale in the field of electrification.” Reithofer also said that this step is a crucial one to achieve “sustainable mobility.” Since 2006, BMW has cooperated on engines with PSA.
In February 2010, the companies said they will develop 4-cylinder gasoline engines that meet the latest European Union environmental rules.
This venture follows a memorandum of understanding on hybrid-power technology development that both parties signed in October. BMW Peugeot Citroen Electrification will ask suppliers to participate in the development process and it may offer the products to other manufacturers as well.
The management of this joint venture and the rest of its employees will be taken from the personnel of the two companies. The merger will also hire more staff from outside sources. The major management positions will be equally distributed among the companies.
Wolfgang Güllich who is in charge of BMW Group’s Purchasing Strategy, is going to be BMW Peugeot Citroën Electrification’s Chief Executive Officer while Jean Leflour, who is presently the Director of Customer Satisfaction as well as Quality Planning at PSA Peugeot Citroën, will be the Managing Director.
Norbert Reithofer says that this merger will let the company accomplish considerable economies of scale in the electrification field. In addition, it represents a crucial move on the road to continuous mobility.
Philippe Varin notes that with this joint venture, they can surely develop and expand their expertise as well as create a European leader in the area of automotive hybrid innovation. For many years now, both BMW Group and PSA Peugeot Citroën have successfully worked together on engines.
In fact, they have jointly built more than a 1.8 million units from 2006 to 2010. In February 2010, both companies made an agreement to create the next generation of the 4-cylinder petrol engine they designed together, which should meet EU 6 requirements. The jointly designed engine is presently included in some MINI, Citroën and Peugeot brand models.