[dZired]

General Motors is reportedly in talks with the PSA Group (owners of the Peugeot and Citroen brands) to sell its European business operations. If this deal is finalised, the PSA Group is expected to take over the Vauxhall and Opel brands from General Motors.

If the PSA Group does acquire GM's European business, it would become the second largest automaker in Europe with a market share of around 16.3 percent. Volkswagen AG is currently the leader of the European passenger car market with Renault in second place.

Meanwhile, the sale of the Vauxhall and Opel brands will take General Motors out of the list of top 3 automakers globally. The two brands currently account for sales of 10 lakh units every year and are a major volume pullers for the American automotive group, which is presently the third largest car manufacturer in the world after Volkswagen and Toyota.

Further details about the probable deal structure and valuation of the Vauxhall and Opel brands are not available as yet.

Source: Reuters

Link to Team-BHP News

[GTO]

Surprising news honestly. Peugeot was in trouble until Carlos Tavares successfully turned the company around. Full credit to him for that. However, I don't think it's a good idea for them to buy Opel, a company that has consistently bled money for 10 - 15 years. It would make Peugeot weaker. I think this Carlos is trying to do what the other Carlos (Ghosn) did with Renault-Nissan, but one really can't compare Opel & Nissan. Opel will be a huge drain on Peugeot's resources.

For those interested in the topic, Bloomberg has an excellent 6-point synopsis - link to article:

1. Why would GM want to get out of Europe?

GM has struggled for years to turn around Opel, with losses totaling more than $20 billion since 1999. Future prospects remain challenging, given that Opel is a volume carmaker with low profit margins producing vehicles in countries with high labor costs, including Germany, Spain and the U.K. The market is also saturated with overcapacity.

[volkman10]

Groupe PSA acquires GM's Opel/Vauxhall brands and GM Financial's Europe operations for 2.2 billion euros.

Link

[AutoSphere]

Some more details on the deal. Interesting to note that GM will continue to have responsibility for the pension provisions for Opel employees working in Germany and the UK.

http://www.autonews.com/article/2017...-begin-to-leak

[abhishek46]

This news is very surprising.
Opel/Vauxhall are definitely not laggards in the Europe Market.
They are closely behind Renault, in third place in overall sales in Europe.

They have a very wide and above-average product line, strong powertrains & reasonable brand value as well.

Instead of focusing on slowly increasing profitability, they chose to exit Europe altogether. This does not sound like a very rational decision.

Wondering what next is on the cards!

[devarshi84]

Sound decision, forced by The CEO of GM and TRUMP administration. Wonder what will happen to Holden.

PSA now has another Carlos (Tavares) Playing Magician just like Carlos of Nissan-Renault- MItsubishi Fame.

Excellent move. WOnder what led PSA to buy Ambassador though. :P

[ajmat]

Originally Posted by abhishek46

Instead of focusing on slowly increasing profitability, they chose to exit Europe altogether. This does not sound like a very rational decision.

Wondering what next is on the cards!

Three things

1: Brexit - most of GM's sales and production were in the UK. With Brexit, the auto component base as is an unknown

2: Dieselgate - Increasing regulation and requirements - GM do not wish to put in good money after bad to incrementally improve its low market share. Ampera excepted, it has no hybrid versions available.

3: High Base cost of the cars - The base cost of Opel/Vauxhall cars are high. Partially due to the low volumes. VW nailed it by spreading costs across various models and brands. Ford did this by spreading the same car around geopraphically

[SwapnilNalavade]

Life Goes A Full Circle, it was Hindustan Motors which brought the Opel Brand in the 90's to India. Now PSA has tied up with Hindustan Motors to make cars in India and has also gone ahead to acquire Opel - Vauxhall, so if tomorrow PSA decides to sell Opel cars in India it would be Hindustan Motors - Opel once again.

[volkman10]

PSA Group completed its takeover of the Opel and Vauxhall brands from General Motors.

PSA installs two French managers at Opel. Opel plans much leaner management structure.

Link

[GTO]

An excellent post on Opel's situation in Europe. From G42dog on Jalopnik.

Growing up in Germany, my perspective is more about Opel in its European home market - and that’s a bit different from yours, as you mostly focus on global and US perspectives. The VW Passat and Golf changed European volume cars forever. Until then, Opel was very much in the mix - if you weren’t going to buy a luxury car, then among the regular people, an Opel was definitely a good option. The Kadett and Ascona and Rekord spanned the market from entry level to solid middle class family car, and compared to VW with it’s rear-engine air-cooled relics (I love those cars, they are hella cool - but not in a mass-market reliable desirable transportation sort of way), they were the bomb. My parents had a Rekord wagon that served well - that’s what they graduated to from a Beetle, and it was a solid (if somewhat uninspiring) family car at the time.

Thing is, VW went from relics to offering something very different. The Mini and the Renault 5 had gone nuts on FWD with transverse mounted engines, and for the average person, those things not only handled better and were nicer to drive - but they had rather amazing packaging advantages, so you could get away with smaller cars. This being the early 70s with the OPEC crisis (1973) and oil (and therefore fuel) prices spiking - yep, that made a difference. VW saw that, and they came out with the Passat in 1973 (a gentle badge reengineering of the Audi 80 - longitudinal engine but FWD), and then the Golf. And damn, that Golf changed everything. That was 1974, a year after OPEC I, and all of a sudden here you had a practical, fun to drive, affordable and fuel efficient modern compact family car. All the packaging goodness of the smaller FWD cars like the Mini and R5 (Le Car...), but just big enough for families and young couples. The current Kadett (and Ford’s Escort, for that matter) all of a sudden looked like a dinosaur.

It wasn’t until 79 that Opel answered with a new, now FWD Kadett. And it wasn’t until 84 that they had their second generation Kadett that was finally somewhat competitive with the (by then Mk II as of 84) Golf. And ever since then, in compacts, the Astra (the Kadett’s successor) has, as far as Europe goes, always been sort of the less preferred car, just like the Ford Escort (and then Focus). The Golf became the standard of the class.

In mid size cars, Opel actually acquitted itself better. The Rekord was replaced by the Omega, and it was still RWD - but that was a good thing, because it actually had the chassis to back it up. The Passat was all about utility; the Omega had a bit of zip to it. People who wanted RWD dynamics in a family friendly package and a hint of luxury went Omega, rather than Passat - unless they could afford a BMW or Merc. But then over the years the Passat became better and better - and these days, the Insignia (the Omega’s successor) is a nice car, but doesn’t sell nearly as well as the Passat (and can’t hold a candle to the luxury cars, of course).

Whenever I go back home to Germany to visit, if I end up riding in friends’ or family members’ cars, or renting a car, I find that today’s Opels are damn nice cars. But in terms of how they’re viewed, people still look at the VW as the standard. So they’re the perennial runner-up. They do, however, have a huge presence. And just like Ford, it would seem that selling cars in Europe is of a kind with selling cars in the rest of the (non-US) world. They can’t be serious about just abandoning that market. Snuggle up a little more closely with PSA? Sure, that makes sense (those guys no longer build complete shit, either - something about the Chinese investors demanding results, I guess...) But abandon the whole thing? When they finally have truly global platforms? That seems a bit nuts to me.