Japan's Mitsubishi Motors Corp. and France's PSA Peugeot Citroen won't form a capital alliance in the midst of the current indecisive business outlook, but they would keep on talking towards extended business ties, said both the companies in a joint statement on Tuesday.

Both car makers had announced in December that they were on talking terms to sign a deal to build on existing project-based ties such as SUVs and electric cars. Mitsubishi said that a capital alliance could be part of the contract. A capital tie-up was just one of several alternatives, said Mitsubishi at that occasion.

The potential capital alliance would help Peugeot-Citroen save time in obtaining future technologies by using the Japanese firm's well-developed systems for electric cars. It could also make an entry into the U. S.