PSA Peugeot Citroen (>> PEUGEOT) and Ford (>> Ford Motor Company) will phase out their cooperation in some diesel engines, the companies said on Thursday.
"The two companies have decided to independently develop and manufacture their larger diesel engines," Paris-based Peugeot said in a joint statement with the U.S. car maker.
Announcing plans in February for a broad-based alliance with Ford's Detroit-based rival General Motors (>> General Motors Company), Peugeot had said the tie-up would not affect existing partnerships including joint diesel-engine production with Ford.
Peugeot and Ford will continue to cooperate on smaller diesels and a new generation of engines developed to meet new European emissions rules entering into force in 2014, the companies said.
(Reporting by Laurence Frost)