General Motors shook up the European automotive industry when it reached a deal to sell Opel and Vauxhall to France’s PSA Groupe this month. While GM looks to save valuable resources by foregoing development of Europe-only vehicles, PSA Groupe has bigger plans.
Robert Peugeot, chairman of the PSA Groupe’s strategy committee, explained to Reuters “All large carmakers have a volume of three million cars in one important market”. With the acquisition of Opel and Vauxhall, PSA will trail only Volkswagen in European market share with 17 percent. Volkswagen currently holds 24 percent of the market.
And PSA thinks it will save $1.84 billion each year by 2026 after fleshing out economies of scale for its three brands plus Opel and Vauxhall. The French automaker went on to state Opel should return to profitability by 2020 with its plans.
The Peugeot family struck down any fear of sales cannibalization, too. Pointing to the German and UK markets, Opel and Vauxhall outsell Citroen, Peugeot and DS combined in both countries. PSA also thinks adding the brands will help sway consumers who would never consider a French car.
What is clear is PSA’s intentions to go global. Jean-Philippe Peugeot added the purchase of GM’s European divisions will allow PSA Groupe to “conquer the rest of the world step by step”. Currently, GM and PSA Groupe have a non-compete clause, which means PSA is forbidden to sell any GM-developed vehicles in markets where the U.S. automaker is present. That means you shouldn’t expect an Opel to arrive in North America anytime soon.
However, it leaves the future wide open, and PSA is already shaking up Opel products. The 2019 Corsa F is expected to switch to a PSA platform for its introduction and share plenty with the Peugeot 208 subcompact.
PSA should take full control of Opel and Vauxhall by the year’s end.
Comments
GM needs to draw PSA closer like Toyota has Mazda and Subaru. GM and PSA could both save money by partnering especially on Latin American projects.
GM could even sell PSA technology and platforms.
Tying into PSA is like Chrysler tying to Fiat. It is the boat anchor that will take toy down.
GM is best working on development programs with Ford and Honda as they already are.
Scott–GM can and should partner with multiple automakers when and if the project makes sense.
PSA is far more technology rich than Chrysler and could serve as a good junior partner like Mazda is to Toyota.
As for Ford, it would make a great merger partner for GM.
PSA wants to conquer the automotive world.
Meanwhile, Sergio Marchionne has already invented a jetpack made of cheese that can travel faster than the speed of sound, but he won’t let anyone see it unless another automaker mergers with FCA and lets him take over the whole enterprise.