If it succeeds in acquiring General Motors’ European subsidiary Opel-Vauxhall, French automaker PSA Group expects to grow the cumulative sales volume of the combined company.
Speaking to reporters during PSA’s earnings conference last week, PSA chief executive Carlos Tavares said that the company would aim to sell more than 5 million vehicles annually within “a few years” if it closes the deal to buy Opel. Speaking to Reuters, sources familiar with the projections believe that the time frame for the target is between 2020-2022. The target spans PSA’s current markets of Europe, China, and South America, but does not include North America, which the automaker plans to enter in roughly ten years.
PSA and GM Europe delivered a combined 4.3 million vehicles in 2016, of which:
- PSA delivered 3.15 million, an increase of 5.8 percent over 2015, and
- GM Europe (Opel-Vauxhall) delivered 1.18 million, a 4 percent increase over 2015
In other words, getting to the 5 million units mark would require the combined entity to increase sales volume by approximately 700,000 units.
PSA is in advanced negotiations to buy GM’s European Opel-Vauxhall subsidiary. Informally known as Opel, the unit consists of the Opel brand, which is sold all over Europe except for the United Kingdom, as well as the British Vauxhall brand, which is sold exclusively in the U.K. The two firms are reportedly looking to finalize negations by March 1, prior to the start of the 2017 Geneva International Auto Show.
Comments
Won’t happen, it will just compress into similar sales they have now, people will shop around for better marques
This is as ambishous or delusional as Sergio at FCA selling 400k Alfas globally and 150k in N America by next year.
No doubt…Sergio and FCA is what I also thought of lol.
Very delusional……Grandiose thinking
PSA like Fiat don’t even know their market, they’d do very well selling Kei cars imported from Japan & built in a factory in Europe, this would up their market share possibly even double it, it would also widen out their range. Profits would be slim yes, but the novelty of it plus their target audience of people with no interest in cars, little money, people just wanting a small car all fits in with what their about. To some extent all three have put their toe in the water with Kei cars rebadging Mitsubshis, PSA’s ion & C zero a A segment MPV based on Mitsubushi’s I miev springs to mind. PSA also own DFSK & in France there are numourous microcar manufactures teenagers are allowed to drive at 16. Fact is nobody is going to buy a big PSA or Fiat car so in order to gain additional market share have to do something different, this suits them to do, to be a successful company you’ve got to know your market.
Opel Agila A was a version of the Suzuki R+, which is a Kei-Car in Japan, but in Europe without the engine displacement limits of 660 cm³.
Kei cars hat outside of Japan not the tax exemptions which they got after the previous world war as an incentive to mass motorisation.
They have nowhere been a success a export article.
Observer 7, Agila A is a Kei car but I don’t think it was a case of GM saying let’s sell Kei cars I think it has more to do with before 1995 there was only Suzuki, Diahatsu & possibly Fiat in the A segment, then all the big players decided to enter the A segment. GM a large & medium maker of cars was late to the party & obviously needed something in the A segment, having part owned Suzuki a joint A segment car arrived in 2000 thus being Agila & Wagon R. Nowadays GM’s A segment offerings are more suited to the market in Viva/Karl & Adam, with Viva/Karl the basic offering enabling B segment Corsa to go more upmarket & Adam the more posher A segment to compete with likes of Fiat 500, DS3 etc
While the Japanese Suzuki Wagon R+ was a Kei Car, as I wrote, the Opel Agila was not.
The lenght of a Kei Car is limited to 3.4 meter (since 1998, before it was less), the Agila A came with a length of 3540 mm i.e. 3.54 meters. Also, the Agila A’s engine displacement was 1 or 1.2 liters, while a Kei car’s engine is limited to 660 cm³.
There are cars on European streets which would fulfil the Kei Car regulations, but the European (or at least the German regulations) stipulate a maximum speed of 45 km/h. This morning again I have see such a car.
It is also not registered with a regular licence plate as a car, but only with an insurance plate like what is called in German a “Moped”, a light motorbike with maximum speed of 45 km/h.
GM also had cars on offer in Kei car size. Chevrolet’s best seller in Germany was the Matiz. It was only 95 mm too long to fit into the max length…
This deal will never happen. No way can PSA turn a profit while paying licencing fees plus find the cash to literally rebuild Opel.
To further complicate, PSA really needs to wait for its new platforms that won’t be ready until 2020, and then pay for an additional marquee’s designs.
Generally, intellectual property is part of the deal. I would think that 2 Billion would at least cover European rights to autos already debuted such as Astra and Adam while excluding US (Chevrolet) rebadges like Bolt.
GM should keep Opel, but close enough plants in Spain and the UK to ensure profitability at 5.5% market share. GM, due to Buick, needs two lines.
The Ellesmere Port, Luton and Zaragosa plants are among Opel Group’s most productive plants and the UK is Opel Group’s largest single market. Indeed, Vauxhall’s Ellesmere Port Astra line produced more in 2 shifts than the now defunct Opel Plant at Bochum produced in 3 shifts. Shuttering the UK and Spanish manufacturing facilities would lower volume and increase costs. Indeed, given Zaragosa is by far Opel Group’s largest plant, its unlikely that Gilwice, Russelheim and Eisenach could actually produce sufficient vehicles to maintain a 5.5% market share.
Furthermore in the case of the UK, because cars are sold in Sterling and not Euros – shuttering Ellesmere Port and Luton would increase exchange rate risk. A significant part of the reason Opel Group is in the mess it’s in, is because for the past 35 years, it the company misaligned its production and cost footprint with its sales and footprint.
Mind you, most of the production of Ellsmere Port and Luton goes over the Channel to the continent.
It is rather that Brexit would make those plants obsolete, because as just nodes of a continent wide production process, the barriers erected by the rules of the island would just be brakes to an efficient production.
You should know that industry on Great Britain exists only because of the four decades long participation in developing an European Internal Market. As the imperial hydrocephalus of a now longer existing empire, it had not and has not a future.
OTOH, the Luton plant which produces all the Vivaros for Opel and the island (branded as Vauxhall) could become easily redundant after a PSA-Opel merger — the combined company could replace the Vivaro aka Renault Trafic by its PSA counterpart produced in France. But long term contracts with Renault would probably prevent that.
psa have better quality than VAG gonsern VW brand i think or something same good. but yes i think today PSA is better quality level many thing than VW. Opel is not as close to the.
just high qualitu and thats all
OPC that won’t worry the British or German marques one bit
Wonder if the sale would enable Gm to then buy fca giving them a base in Europe with fiat and a new launch pad to bring Chevy back , while perhaps shuttering Chrysler and maybe even dodge in US ?
Observer 7, the Matiz apparently rejected by Fiat as a replacement to the 126 later to be sold by Daewoo – then Chevy, I always said back then it was a mistake to badge a 800cc City car as Chevy. A 1.4 C segment hatch to change opinions yeh, but a 800cc minicar? Anyway they did & they wonder why Chevys brand is damaged in Europe, it could be decades possibly never to fix this.
When you want by your words point out how good looking the 1st generation Matiz was — I am all with you.
A very nice looking car that was.
As your favorite subject, the Kei Cars, those were and are shaped by special tax conditions favoring cars with limited dimensions and limited displacement of their engines.
Similar midgets have been available in the European markets — when you are old enough you might remember the BMW Isetta (shorter than a Smart, and with the front acting as the one and only door), the Messerschmidt Kabinenroller (two persons one behind the other, opening like an aircraft pilot seat), the Goggomobil, or the Lloyd 300. Those cars would have qualified as Kei cars. In England there was a special tax rebate for three wheel cars, so three wheel cars were present on the island long after they had vanished in other countries.
But where did they go?