According to the french car magazine Auto Journal (issue from May 1997) the final decision on Project Y-5 was finally made after month of PSA internal discussions.
The XM successor will be developed and build but with a restricted financial budget. In
fact the whole project was questioned because of the far too low sales numbers of the
Citroën XM and the Peugeot 605 (and Renault Safrane for that matter), but it was decided
that Citroen can't be without a top range model car.
The new big Peugeot (PSA-Code Z-8) will be introduced in 1999, but the successor of the XM will not be ready before 2001.
Therefore the current XM most probably will be restyled in 1999. The main feature of the restyling will be a new front with a lot of glass like the SM.