PSA Group chief executive Carlos Tavares has provided some insightful commentary on his firm’s bid to acquire GM’s Opel division, stating that the move would create value and enable rapid savings.
Speaking to analysts and reporting on Thursday, Tavares said that if successful, PSA’s purchase of the Opel unit would enable the rapid convergence of underlying vehicle platforms, thereby resulting in significant cost savings.
“When you look at the product plan you see that you can in a quite speedy way implement quite significant synergies,” he said.
In addition, Tavares stated that Opel and its U.K.-only sister brand, Vauxhall, would bring in new customers who are reluctant to purchase a French vehicle.
“There is significant complementarity in terms of customer consideration between the German Opel brand and our three French brands,” said the chief executive, referring to the PSA’s Peugeot, Citroen and DS marques.
“This company needs help,” he said, referring to Opel. “What we see today with the situation of Opel… has a lot of similarities with what we were facing four years ago.”
In 2014, the PSA Group was on the brink of bankruptcy. After receiving a state-backed bailout and with Tavares at the helm, the carmaker rebounded to record levels of profitability. On Thursday, the group posted a 6 percent operating margin for its automotive business for 2016, while also raising its medium-term earnings target.
General Motors has been in advanced stages of negations to sell its European operations to PSA. 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.
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