Peugeot shares have jumped 10% after the firm said it was in talks about possible "co-operations and alliances".

It follows a report in La Tribune that the carmaker has been in talks with General Motors for several months. Peugeot would not confirm which companies it was talking to. General Motors said it routinely talks to other firms in the industry.

Last year, Peugeot's car-making business reported a loss due to tough conditions in the European car market.

In a brief statement on Wednesday, Peugeot said: "In the context of its globalisation strategy and improving its operational performance, PSA Peugeot Citroen looks at potential cooperations and alliances."

"Discussions are taking place and there can be no certainty at this stage that these discussions will result in any agreement."

The report in La Tribune said that, if the talks are successful, an alliance could be announced at the Geneva car show in the first week of March.

A deal would require the approval of the Peugeot family, which still holds 30% of the company's shares.

GM reported record annual profits last year of $9.2bn (£5.8bn), but its European operations made a hefty losses of $747m and GM is planning further costs cuts for the business.

Source;bbc