PSA Peugeot in talks with Mitsubishi for strategic partnership

NEW YORK: French auto maker PSA Peugeot Citroen today said it is in talks with Mitsubishi Motors for a "strategic partnership".

The two firms have already worked together in certain areas which includes a joint venture in Russia, on electric cars.

In a statement, PSA confirms that "it has started discussions with Mitsubishi Motors concerning the possibility of extending their relationship which could lead to a strategic partnership."

Meanwhile, an American daily, The New York Times quoting PSA spokesman Laurent Cicolella said: "For now it's too early to give details about how the exchange would work...The purchase of stake was one of several options.

According to the publication, Cicolella declined to comment on a report in Japan's Nikkei newspaper suggesting that PSA might buy 30 to 50 per cent of the Japanese firm which has a market capitalisation of USD 8.45 billion.

PSA would remain cautious in its talks and was not setting a deadline, the daily said citing Cicolella.

In September, Mitsubishi and Peugeot companies agreed to develop a vehicle based on Mitsubishi's i-MiEV electric car, to be sold in Europe by the end of 2010 under the Peugeot and Citroen brands, the report noted.

Peugeot and Mitsubishi already share platforms for sport-utility vehicles (SUV), and they are building a assembly plant together in Russia to manufacture Peugeot, Citroen and Mitsubishi brand mid-size cars and SUVs, it added.

"The two companies have enjoyed a very beneficial relationship since 2005. Speculation about the two automakers deepening their collaboration has been going on for years, the NYT said attributing to Mitsubishi Motors Europe spokesman Daniel Nanas.

Auto industry around the world is in pain and Mitsubishi has also been struggling and posted a net loss of 36.4 billion yen, for the six months ended September 30.