PSA and Ford Will Extend Diesel Tie-up, Report Says

The automakers will sign a contract before the summer to extend the tie-up, Les Echos reported, citing an internal PSA source. As a result, the cooperation will continue beyond a deadline set for 2017, the paper said.

PSA declined to comment on the report.

PSA has said it will roll out the DV-R family of diesels in 2017-2018 to replace its 1.4- and 1.6-liter diesels. The engines will comply with the Euro 6.2 emissions standards that take effect in 2017.

PSA is investing 60 million euros to create annual capacity to make 640,000 of the engines at its factory in Douvrin, northern France, in 2017. In 2018, a second production module with an annual capacity of 640,000 engines will be installed at the automaker’s plant in Tremery, eastern France.

According to Les Echos, PSA will begin making DV-R engines for Ford in 2017 in Douvrin and in Tremery in 2018. Final assembly of the Ford engines will take place at a UK facility, Les Echos reported.

PSA and Ford have partnered on engines since 1998, staring with HDi and TDCi units. The alliance expanded to include diesels the comply with Euro 5 and Euro 6 emissions rules.

BMW and Ford ended engine deals with PSA after the French automaker entered a short-lived alliance with General Motors in 2012, but PSA and Ford still shared some small diesels.

BMW began introducing its own small gasoline engines in 2012 for Mini models and the BMW 1 series, replacing those developed with PSA and produced in Douvrin, while Ford is dropped PSA diesels with displacements of 2.0 liters and above.