Business secretary Greg Clark has called his talks with the French government and PSA "constructive", saying the French firm wants to build on the success of Britain's Vauxhall business.
In a short statement, Clark said the PSA "stressed that they valued highly the enduring strength of the Vauxhall brand, underpinned by its committed workforce".
Clark jetted to Paris for talks over the French company's prospective takeover of General Motors' European Opel operations, including Vauxhall.
In his statement he said executives from Peugeot-maker PSA and the French industry minister explained the rationale behind the potential alliance.
"While discussions are still on-going, they made clear to me that in any deal these were strengths they would wish to build on. We agreed to remain in close contact during the period ahead," Clark said.
Concerns have been mounting over the future of thousands of jobs at Vauxhall, which employs 4,500 staff at plants in Ellesmere Port and Luton, while there are thousands more people working in its retail network and reliant on the firm’s UK supply chain.
Yesterday, Clark said he had been reassured by General Motors that the firm didn't intend to "rationalise" its Vauxhall operations in the UK.
GM did not provide further details, saying in a statement that its aim with the sale “is to build on the success of Opel Vauxhall and to put the business and the operations in the strongest possible position for the future”.