Peugeot Citroen has canned its plans to take a substantial stake in Mitsubishi.
PSA’s chief executive Phillippe Varin and Mitsubishi president Osamu Masuko met at the Geneva show earlier this week, but Varin told the press that the conditions for the planned deal had not been met.
Financial sources said that PSA was actively considering taking between a 30 and 50 per cent stake in the ailing Japanese car maker, spending as much as £2.2bn. PSA sources suggest that the tie-up plans are now dead.
Peugeot Citroen wanted to create an alliance, which would help give it a global footing as it attempts to reduce its dependency on the European market.
Mitsubishi shares crashed as the markets raised fears that it needs major cash injections to keep it afloat. Mitsubishi has seen its sales fall by over 50 per cent in the last decade.
Peugeot current uses a modified version of the Mitsubishi Outlander compact SUV as its 4008 model and the Citroen C-Crosser. It also sells a version of Mitsubishi’s innovative i-MiEV electric car as the Peugeot iOn and Citroen C-Zero.