A French-German merger - under the banner of General Motors - has been ruled out.

General Motors' German subsidiary won't be merging with French automaker Peugeot Citroen even though the two parties are cooperating on a number of future products, a new report indicates.

An unnamed Peugeot manager told France's Autogazette that PSA, the parent company of Peugeot and Citroen, will go it alone despite significant hurdles to recovering in the struggling European new car market.

"[A merger] has never been an issue during the discussions," Peugeot's German market chief, Olivier Dardart, said in response to a question about how far the alliance between the two brands has begun to stretch.

"The point [of the alliance] is not to reduce personnel," he said.

PSA and GM's Opel division have begun working together on a number of compact and subcompact models as part of an expanded partnership. Both PSA and Opel have seen sales and profitability tumble as a result of a volatile new car market in Europe. Neither automaker has as significant a presence globally as Volkswagen, which has insulated the German automaker from woes in its home market.

Last week, both automakers canned an effort to build a midsize model that might have made its way - in one shape or form - to the North American market.