GM responded with a near-identical comment: "Since 2012, General Motors and PSA Group have been implementing an alliance covering, to date, three projects in Europe and generating substantial synergies for the two groups. Within this framework, General Motors and PSA Group regularly examine additional expansion and cooperation possibilities, as well. PSA Group and General Motors confirm they are exploring numerous strategic initiatives aiming at improving profitability and operational efficiency, including a potential acquisition of Opel Vauxhall by PSA. There can be no assurance that an agreement will be reached."
GM has been particularly active in recent years in seeking a broad-based co-operation with Peugeot in a bid to cut costs and improve profitability at Opel and Vauxhall.
Within the framework of their existing alliance, Opel has developed two new SUV models from existing Peugeot platforms. They are the new Crossland X, which sits on the same structure as the 2008, and the Grandland X, whose underpinnings are shared with the 3008. An even larger SUV model, conceived to replace the Zafira, is also planned, although it is based on the same in-house GMs platform as the new second-generation Insignia.
However, a full-blown merger between the US car making giant and PSA was torpedoed in 2013, when GM suddenly sold a 7% stake in the French government-owned car maker.
The purchase of Opel and Vauxhall makes PSA the second biggest car maker in Europe, with potential annual European sales of more than 2.4 million and a healthy 17% market share. It enables it to overtake Renault and place it behind only the Volkswagen Group in terms of European sales reach.
In 2016, the French car maker's three brands, Peugeot, Citroën and DS booked 1,446,052 sales, and Opel reported sales of 979,427. By comparison, Renault’s 2016 European sales totalled 1,496,394, helped by the continued success of its Dacia brand. The Volkswagen Group, with its Audi, Bentley, Bugatti, Lamborghini, Porsche, Skoda, Seat and VW brands, pulled in 3,498,049 sales.
The Vauxhall brand, purchased by GM in 1925, presently accounts for around one-fifth of Opel sales, with the UK traditionally being the largest market for the Corsa and Insignia. However, its future under the possible control of PSA raises some uncertainties. One scenario already mentioned by GM sources in discussions with Autocar is the possibility of a sweeping consolidation of Vauxhall's operations in the UK, with the brand name consigned to history and replaced by Opel – a move that was seriously considered by GM following the financial crisis of 2009 but ultimately decided against.
Struggling profitability for General Motors in Europe
GM’s European operations have been unprofitable for the past 16 years, with combined losses put at over £6.9bn since 2009. The US car making giant initially expected a return to profitability in 2016. However, a devaluation of the British pound and cooling sales in the UK following the Brexit vote is claimed to have resulted in unexpected currency losses in 2016, leading to an operating loss at Opel of £194m last year.
PSA itself came close to bankruptcy in 2013 following years of mounting losses. In a company-saving measure, the Peugeot family was forced to sell 25.6% of its stake in the French car maker, with 12.8% going to the French government and a further 12.8% to Peugeot’s Chinese joint-venture partner, Dongfeng. Each paid more than £800,000 for their share of the company. Shortly afterwards, PSA sought a strategic alliance with Opel with a view to joint development of a number of key platform architectures – a move that led to the two establishing a close working relationship and the foundation for the buyout negotiations.