French carmaker PSA Peugeot Citroen Peugeot
Established carmakers are looking to joint ventures and partnerships to share the costs of developing new technologies to meet tightening emissions legislation and win over customers in the face of growing competition from newer players.
The joint venture, BMW Peugeot Citroen Electrification, will operate in two locations -- Mulhouse in France will be its production base, while research and development will be carried out in the greater Munich area in Germany, the carmakers said.
Long-standing partners PSA and BMW said in October they would create a new JV focusing on hybrid technology. They already jointly develop engines.
BMW Chief Executive Norbert Reithofer and PSA Peugeot Citroen Chief Executive Philippe Varin told a joint press conference the cooperation could be extended further.
Reithofer said it was too early to say which areas could be covered, as it was like looking into a crystal ball.
PSA's Varin later told Reuters Insider TV there was no need for an equity swap for the ongoing cooperation with BMW.
The new hybrid joint venture is set to start operating in the second quarter of this year, subject to approval from authorities.
By 1449 GMT (9:49 a.m. EST) BMW shares were trading 0.48 percent higher. PSA shares were trading 0.85 percent higher, in line with the Stoxx 600 European Autos index <.SXAP> up about 1 percent.
The companies said 400 people should be working for the joint venture by the end of this year in Germany, while the French part of the JV will have about 250 staff by the time production, which starts in 2014, ramps up fully.
The new technologies will equip BMW, Peugeot and Citroen models from 2014.
(Reporting by Helen Massy-Beresford and Gilles Guillaume; Additional Reporting by Adrian Murdoch and Oezcan Ayboga)