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Ailing PSA Peugeot Citroen Group has just been granted temporary approval by the European Union for 1.2 billion euros (S$1.9 billion) of French-backed bonds. As part of the deal to obtain final approval, PSA will have to submit a restructuring plan within the next six months to show how the group and its bank unit (Banque PSA Finance) intend to return to profitability without state help. "Now one needs to know what the commission will ask in terms of restructuring for the group and this remains unclear," said Pierre Bergeron, a credit analyst at Societe Generale in Paris. The temporary approval will allow the bank to pay back this year's maturities of 500 and 750 million euros in July and September respectively. In early 2012, PSA Group and General Motors announced the creation of a global strategic alliance to co-develop engines and a global purchasing joint venture for the sourcing of components and other goods and services. The alliance is expected to contribute to cost savings for both car manufacturers.

PSA Peugeot Citroen plans to put Hybrid Air powered vehicles on the road by 2016. The system combines an internal combustion engine with compressed air energy storage. It is similar to electric hybrid system but uses compressed air for energy storage rather than batteries. A hydraulic pump/motor unit recovers energy generated from the combustion engine and from braking/deceleration and stores it in the air energy storage unit. The system claims to improve fuel efficiency by 45% and increase a vehicle's range by 90% as compared to conventional engines of similar power ratings. The system can operate solely on gasoline power, air power or a combination of both when high power acceleration is required. http://www.youtube.com/watch?v=rjqFihLltSY In small vehicles such as the Citroen C3 and Peugeot 208, the system is said to achieve a combined cycle fuel efficiency of 2.9-litres/100 km with an estimated CO2 emissions of 69 g/km. PSA plans to introduce the system in their B segment models from 2016 in the first phase. C segment and light commercial vehicles will follow after that.

PSA Peugeot Citroen revealed the group's new EMP2 platform (Efficient Modular Platform 2) during their Innovation Day celebration. It will underpin the next generation Peugeot 308 and Citroen C4, as well as other models in the C and D segments. The French group has produced a video depicting the various advantages of the new platform. It even comes with a sound track befitting an action-packed movie. The EMP2 platform is very flexible and is suited for a wide range of body styles including SUVs, light commercial vehicles, hatchbacks, sedans and estates. Making use of high-strength steel, aluminum and composites, the EMP2 saves some 70kg over the current platform. The new platform promises to deliver increased safety, driving pleasure and comfort in addition to improved fuel efficiency. Having a highly adaptable single platform across its products is a clever cost-saving strategy for the loss-making Peugeot Citroen, which has been struggling to return to profitability amid weak demand in Europe.