German competition body approves carmakers' union

Competition authorities in Germany have given the go-ahead for a planned cooperation between the carmakers GM and PSA. The US-French deal envisages the development of joint platforms and technologies. The German Cartel Office on Friday approved a proposed alliance between the US automaker General Motors and PSA Peugeot Citroen of France. "Although the strategic alliance results in a certain amount of market concentration, it does not lead to a dominant position of GM or PSA," said Andreas Mundt, the head of the competition authority. The cartel office stated that, despite the planned cooperation, other carmakers would continue to sell more vehicles both in Germany and the whole of Europe in almost all automotive segments. Annual savings The agency also noted that many competitors would continue to have stronger market positions vis-à-vis their suppliers, adding that the office's probe focused in particular on what repercussions the GM-PSA deal would have for companies delivering car components. Earlier this week, GM and PSA announced details on what their future cooperation would include. They mentioned the development of four joint platforms for their cars as well as joint research into automobile technologies. The two sides anounced that the deal would also involve the pooling of their purchasing activities. The agreement is scheduled to come into force in 2013 and is expected to save the two companies $2 billion (1.5 billion euros) annually.