(MENAFN- AFP) General Motors said Thursday it is selling its entire stake in PSA Peugeot Citroen, but stressed its manufacturing alliance with the struggling French automaker remains strong.
GM said it is placing the 7 percent stake, or 24.8 million shares, privately with institutional investors, after holding them for less than two years.
With Peugeot entertaining a closer relationship with China's Dongfeng Motor, GM said its equity support for the company is no longer necessary.
"Our equity stake was planned to support PSA in their efforts to raise capital at the time of the creation of the GM and PSA alliance, and that support is no longer needed," said GM Vice Chairman Steve Girsky.
But Girsky said the two would continue to work closely in manufacturing.
"The alliance remains strong with our focus on joint vehicle programs, cross manufacturing, purchasing, and logistics. We're making good progress while remaining open to new opportunities."
The alliance, which dates to March 2012, aimed to improve both companies' positions in Europe after the regional market plunged into a deep slump, weakening many major automakers there.
Earlier Thursday PSA and GM announced in Europe steps to advance the alliance, which anticipates vehicles the two develop on a shared platform will hit the market in 2016.
"The alliance between PSA and GM is based on a balanced approach. The vehicles of both manufacturers will be highly differentiated and fully consistent with their respective brand characteristics," said Karl-Thomas Neumann, GM's executive vice president and president for Europe.
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