General Motors has confirmed it’s in talks with PSA Group over a number of strategic issues, one of which is the sale of its European subsidiary Opel. PSA controls French brands Citroën, DS and Peugeot and is partially owned by the French government and state-owned Chinese automaker Dongfeng.
GM and PSA have collaborated on a number of projects since 2012 and at one point were close to forming an alliance. The two have also shared manufacturing facilities and technologies, including whole vehicle platforms.
Citing a source familiar with the matter, Bloomberg reports that GM is seeking a multi-billion dollar figure for Opel due to the improving financial state the brand is in after almost two decades of running losses. Opel lost $257 million in 2016, which was an improvement on the $813 million it lost the previous year. And any sale would also include Vauxhall, the name under which Opel operates in the United Kingdom.
GM and PSA Peugeot Citroen alliance
Following its bankruptcy late last decade, GM came close to selling Opel, which it has owned since 1931. It’s not clear why GM is looking to offload the brand now though it may have to do with fears of a downturn in Europe due to Brexit as well as economic and political strife in many other EU countries.
The benefit for PSA would be improved economies of scale as well as access to Opel’s engineering resources and technology, according to Bloomberg’s source. The downside is that it will add more capacity for PSA, which has been struggling with too much already.
We’ll update the story as soon as more is known.