Ford and PSA Peugeot Citroën to Drop JV on Diesel Engines

PSA Peugeot Citroën and Ford said today that the companies have decided to independently develop and manufacture their larger diesel engines displacing more than 2-liters starting in 2015. The announcement, likely the result of the PSA and General Motors JV announced in February, ends a 12-year business relationship.

Peugeot’s expertise in diesel engines as Europe’s second largest automaker was a major factor in helping Ford Europe recover from a disastrous management decision that ignored the rising penetration of diesel engines during the late nineties. Excellent fuel economy and favorable tax treatment in the EU started a trend in diesel engine use – as much as 40% or more in some segments, which continues to this day.

Production of the smaller 1.4-liter to 1.6-liter diesel engines will continue through the imposition of Euro 6 emissions legislation, which goes into effect in 2014. The decision will only initially affect commercial vehicles – Ford Transit – from mid-decade. In the U.S. Ford will build Transit commercial vans for the first time next year, supplementing the aging and rollover prone E-Series van. An unspecified diesel engine option will be available in both cargo and passenger versions of the Transit in the U.S.

In a separate action, the U.S. Securities and Exchange Commission yesterday granted confidential treatment to General Motors for some sections of required SEC filings covering commercial or financial information about the PSA deal.

About Ken Zino

Ken Zino is an auto industry veteran with global experience in print, broadcast and electronic media. He has auto testing, marketing, public relations and communications expertise garnered while working in Asia, Europe and the U.S.
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