GM in Talks to Sell Opel to PSA Group (the Peugeot and Citroën People)

Opel Astra grille logo

The French and Germans are dancing again to an American beat, with General Motors in confirmed discussions to sell its Opel and Vauxhall operations to PSA Group (the parent of Peugeot and Citroën). The two corporations previously bopped to a similar beat in 2012, when merging Opel with PSA was floated as a possibility and the companies planned to co-develop four vehicle platforms in the wake of heavy losses suffered by PSA (nearly $ 5 billion in 2012). That same year, GM’s European arm lost a comparatively paltry $ 1.5 billion, although that loss came on the back of 12—yes, 12—consecutive years of losses.

At the time, the discussions looked like they were taking place between two exhausted men in a lifeboat, each hoping the other one was still strong enough to row. It’s a little different now, with a chunk of PSA now owned by China’s Dongfeng and the two companies sharing some development and engineering projects. But the previous arrangement had somewhat unraveled by the end of 2013, and much about the possible new deal remains odd.

For starters, nobody bothered to tell Opel’s people in Rüsselsheim or the manufacturing works council or the labor union. Unions sit on the boards of European carmakers and have major controlling hands in the way things are done. As it happened, PSA simply punching out a statement in Paris and GM following with its own is not the polite way of doing business in Germany.

And neither PSA nor GM Europe look as if they’re ready to undergo a complicated transaction, despite what their statements may say. Opel failed to make it into the black again in 2016, and its sales in EU countries fell to 979,427, behind the BMW Group for sixth place overall. There is no Chevrolet brand to back it up at the bottom end, with GM having pulled the bow-tie brand from Europe in 2013. Prior to that, in fact, Opel itself had been rumored for closure.

PSA builds Citroëns, Peugeots, and the DS premium brand and has zero footprint in the U.S. market. It fell from being the EU’s second biggest carmaker in 2015 to the third biggest last year, having been overtaken by the Renault Group (and only the French portion, not the Nissan or Mitsubishi bits). If it comes to fruition, a merger of the two operations would lift the new group near enough to 2.5 million sales in Europe, which would vault PSA back over Renault, although it would still be a million cars behind the Volkswagen Group in the same territory.

The deal also would finally stabilize GM’s cash flow out of Europe, assuming it retains a stake in the outfit—and this would be key if the current Buick product plan is to continue, since many new Buicks are rebadged as Opels—although the sale could be seen by some as an embarrassing admission that GM can no longer hack it on the Continent. Some speculation, however, has it that an Opel sale could be a precursor to a larger merger or at least financial tieup between PSA and global GM, possibly in the mode of the Daimler/Renault-Nissan cooperation.

  • Won’t Back Down: Sergio Marchionne Still Pushing for FCA/GM Merger
  • French Press: Can Peugeot and Citroën Really Make It Back to America?
  • French Flier: Citroën’s DS Brand More Likely for U.S. than Ever

There already are products heading for sale from the merged development programs, and the Volkswagen Group (especially with its Volkswagen, SEAT, and Skoda brands) has proved that identical mechanicals are okay if the vehicles are sufficiently different visually. Besides GM’s pride, there is a glaring loser here: FCA. Sergio Marchionne has pushed hard at various times to merge his organization with GM before his company is burned by manufacturing overcapacity. And that door now could be welded shut.


Car and Driver BlogCar and Driver Blog