General Motors and French automaker PSA Group on Tuesday announced the completion of the sale of Opel.
Its acquisition of Opel means PSA Group is second only to the Volkswagen Group for size among European automakers. Combined deliveries for PSA and Opel totaled 4.3 million vehicles in 2016, or about 17 percent of the market.
The figures include those of Vauxhall which Opel operates under in the United Kingdom. The other brands that form PSA include Citroën, DS and Peugeot.
In accordance with the sale, which was first announced in March, PSA paid $1.53 billion for the Opel and Vauxhall brands and $1.06 billion for the European division of the GM Financial lending unit. The latter is now jointly owned by PSA and French bank BNP Paribas. GM is still responsible for existing pension obligations for Opel’s staff which is estimated at approximately $3.54 billion.
The sale of Opel is the latest and most significant in a series of actions GM has taken in recent years to shore up its global operations. The automaker has also ended sales in India, ended sales of Chevrolet and production of some pickup trucks in South Africa, ended sales of Chevrolet in Europe, and ended production of Holden vehicles in Australia.
With the savings, GM plans to invest in higher-return opportunities and new technologies. A slide from a GM investor presentation in March showed the automaker sees serious profit potential for pickup trucks and SUVs in North America, as well as for the Cadillac brand on the global stage. GM also lists the new business area of AV/TaaS (Automated Vehicles and Transportation as a Service), which represents self-driving cars and mobility services, as having strong potential for profit.
PSA, meanwhile, expects to unlock economies of scale with Opel, as well as synergies in purchasing, manufacturing and research and development that are estimated to be worth $2 billion. PSA will also expand Opel outside of Europe, though it’s only allowed to do so with models based on its own platforms. Iran has already been announced as the first new market for Opel.