PSA in talks to buy Vauxhall and Opel from GM

  • PSA in talks to buy Vauxhall and Opel from GM

PSA in talks to buy Vauxhall and Opel from GM

General Motors has been struggling in recent years to turn its European business around, and announced last year that it would be raising United Kingdom auto prices by 2.5% in order to deal with the "speed bump" Brexit had presented to its plans.

Vauxhall and its European sister brand Opel could be bought by the company which owns Peugeot, Citroen and DS Automobiles.

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.

In the aftermath of GM's 2009 bankruptcy, there were intense discussions around shedding Opel, but the automaker ultimately chose to retain its European operations whose engineering platforms undergird some of the vehicles that GM sells in the United States and other markets.

A combination would create a manufacturer with about 16 percent of the European vehicle market, pushing past Renault SA to become the region's second-biggest auto group after Volkswagen AG.

"General Motors and PSA Group regularly examine additional expansion and cooperation possibilities, as well". It was not clear what price GM might want for the European business, or what structure a deal could take. Spokespeople for Opel and the French government, which holds 14 percent of PSA, had no immediate comment. In any deal, however, GM needs to make sure it maintains access to its valuable engineering source at Opel. PSA and GM signed an agreement in 2013 in Europe that involved former taking a seven per cent stake in PSA. In 2016 combined sales of the brands grew by 46,000 units to 1.6 million vehicles, netting a market share of 5.73 percent.