BMW, PSA Peugeot Citroen will invest $138.2 million for hybrid joint venture

Article by Christian Andrei, on March 2, 2011

BMW and PSA Peugeot Citroen revealed that they will be investing EUR100 million ($138.2 million) to jointly develop hybrids. The joint venture, dubbed BMW Peugeot Citroen Electrification, will start operations in the second quarter of 2011. This investment is not expected to produce effects before 2014, the year when the vehicles of the two companies involved will start using the same components.

These parts include battery packs, E-machines, generators, power electronics, chargers and the software for the hybrid systems.

The joint venture has a facility in the greater Munich area where research and development will be done. Meanwhile, the actual production will take place in Mulhouse, France. For these two locations, about 650 jobs will be created. About 400 of these will be based in Germany. At the point wherein production will go full blast in France, the site will have about 250 employees.

While research and development will be conducted in the greater Munich area, the actual production will be done in Mulhouse, France. The company revealed that 400 employees, who are expected to start working with the company towards the end of the year, will be primarily based at its Munich facility. Jobs will be added at the Mulhouse plant once production begins by 2014. Once production is well under way, this facility is slated to have an estimated 250 employees.

The management of this joint venture, including the workforce, will come from the personnel of the two parent companies. In addition, there is also a plan to have external candidates fill the 100 new positions once operations start later this year. Currently the joint venture is looking for engineers with specializations in electronics and electric mobility. BMW Group and the PSA Peugeot Citroën have worked together for almost a decade. In 2002 for instance, the two companies decided to design and produce together the 4-cylinder engines.

For the period starting from 2006 and up to 2010, it is estimated that more than 1.8 million motors have been made for different branded models like, Citroën, MINI, and the Peugeot, to name a few. By February 2010, the partners also agreed to develop the next generation 4-cylinder gasoline engine that was jointly designed, an engine that the two partners hope will qualify with EU 6 requirements.

In October of the same year, both PSA Peugeot Citroën and BMW Group entered into a Memorandum of Understanding with the goal of expanding their current partnership to include hybrid systems. It was later announced in February 2, 2011, that the two partners would call this joint venture as “BMW Peugeot Citroën Electrification”. The plan of these two companies is to develop and manufacture standard hybrid component in order to have their particular vehicle ranges electrified.

The joint venture will look into software used on hybrid systems, generators, E-machines, chargers, power electronics, and battery packs. With this, the two companies hope that these technologies will have an open platform. They aim to support the European auto industry, particularly the field of hybridization. As such, the joint venture will become a full-fledged company and will integrate suppliers through outsourcing development work. It also plans to sell hybrid components to third parties.

Press Release

BMW Group and PSA Peugeot Citroën to Invest 100 Million EUR in Joint Venture on Hybrid Technologies

The BMW Group and PSA Peugeot Citroën plan to invest 100 million EUR in their intended joint venture on hybrid technology named “BMW Peugeot Citroën Electrification”, both companies announced at a press conference in Geneva today. The new company will operate out of two locations – the greater Munich area, Germany and Mulhouse, France. 400 employees are expected to work for the joint venture by the end of 2011. Subject to approval by the relevant competition authorities, the new company is expected to launch its operations in the second quarter of 2011. The new hybrid components will equip both partners’ vehicles from 2014 onwards.

“As responsible carmakers, we aim to create an open European platform and foster the development of European standards for hybrid technologies. This joint venture will also enable us to develop advanced technological manufacturing expertise in Europe in the field of electric powertrains, and to retain all its potential for creating value,” said Philippe Varin, Chairman of the Managing Board of PSA Peugeot Citroën.

“BMW Group and PSA share the same vision of the importance of hybridization in the future. The joint venture will enable us to act more strategically and with a single, shared approach. For us, joining forces also means significant economies of scale, shared development costs, using standardized components and a faster development process,” said Norbert Reithofer, Chairman of the Board of Management of BMW AG.

The greater Munich area is the designated location for all research and development while all production would take place in Mulhouse, France. The 400 employees expected to be on board by the end of the year will be based in Munich. Additional jobs in Mulhouse will be added in time for the start of production in 2014. When production has fully ramped up, the French facility will have about 250 employees.

The joint venture’s management, as well as its workforce, will be mostly drawn from employees of the two parent companies. Apart from this, plan is to fill 100 new positions with external candidates when the joint venture becomes operational later this year. Main job profiles needed are engineers specialized in electric mobility and electronics.

The BMW Group and PSA Peugeot Citroën have been cooperating for almost ten years. In 2002, both partners agreed to jointly design and produce 4-cylinder engines. Between 2006 and 2010, more than 1.8 million motors were built for a number of MINI, Peugeot and Citroën brand models. In February 2010, the two companies also agreed to develop the next generation of their jointly designed 4-cylinder gasoline engine, which will also meet EU 6 requirements.

In October 2010, BMW Group and PSA Peugeot Citroën signed a Memorandum of Understanding designed to expand their existing cooperation to hybrid systems. On February 2, 2011, BMW Group and PSA Peugeot Citroën announced that this cooperation would take the form of a joint venture named “BMW Peugeot Citroën Electrification”.

The initiative between the two companies is aimed at developing and producing standard hybrid components for the electrification of their respective vehicle ranges. It will focus on components like battery packs, E-machines, generators, power electronics, chargers, and software for hybrid systems. This joint venture will enable both partners to create an open platform on these technologies and support the European industry to structure itself in the field of hybridization. To that end, the joint venture will be a full-fledged company and will both integrate suppliers by outsourcing development work as well as sell hybrid components to third parties.

Topics: bmw, psa, partnership

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