1
NEWS
Opel and PSA considering merger
Mounting losses in Europe have prompted GM to consider a joint venture for Opel and Peugeot-CitroenStruggling with mounting losses, General Motors’ European division and PSA (Peugeot-Citroen) are reportedly considering a merger in which GM would take a 30 per cent stake in the French carmaker and pump in $10 billion to fund future product development.
A report by Automotive News Europe suggests this is one of several proposals currently under consideration, with other possibilities said to include GM selling Opel in its entirety to PSA or GM buying the latter’s automotive division.
GM Europe and PSA already have an alliance in place, as part of which the two concerns are jointly developing future models, including replacements for the Opel Insignia (pictured) and Citroen C5/Peugeot 408, as well as a rival for Renault’s low-cost Dacia range. Also in the pipeline are a supermini and a range of compact SUVs.
Some sources have speculated the French Government and militant unions might veto the idea of a joint venture, but the fact that PSA will retain a 70 per cent controlling stake plus the dire fiscal state of the company might be enough incentive for the deal to be looked upon favourably.
The downturn in the European market has hit the General and PSA particularly hard, with GM’s European division forecast to lose more than $1.5bn this year, while Peugeot-Citroen is writing off $250m every month.
A merger between the four brands (Opel/Vauxhall/Peugeot/Citroen) could theoretically deliver huge economies of scale as it would enable them to use joint platforms and share development costs for future products. It would also enable the joint-venture factories to run at optimum capacities.
However, it would take several years for any savings to be reaped, and in the meantime a handful of existing GM Europe/PSA factories would become redundant and therefore need to be shuttered.
Industry pundits suggest GM, which has lost money in Europe for 12 straight years, won’t announce anything until after it reaches a new labour deal with its German workers.
Read the latest news and reviews on your mobile, iPhone or PDA at carsales' mobile site...
Share this article
Written byGautam Sharma
See all articlesOur team of independent expert car reviewers and journalistsMeet the team
Stay up to dateBecome a carsales member and get the latest news, reviews and advice straight to your inbox.
Subscribe todayRelated articles
Disclaimer
Please see our Editorial Guidelines & Code of Ethics (including for more information about sponsored content and paid events). The information published on this website is of a general nature only and doesn’t consider your particular circumstances or needs.
Please see our Editorial Guidelines & Code of Ethics (including for more information about sponsored content and paid events). The information published on this website is of a general nature only and doesn’t consider your particular circumstances or needs.
Contact
Advertise with us
International marketplaces
Scan to download the carsales app
Want more info? Here’s our app landing page
App Store and the Apple logo are trademarks of Apple Inc. Google Play and the Google Play logo
are trademarks of Google LLC.