General Motors Considers Selling Opel And Vauxhall To PSA

A report has surfaced that General Motors is considering the sale of its Opel and Vauxhall European operations to PSA, the umbrella group that owns Peugeot and Citroen. The two companies acknowledge they are holding talks but insist there are “no assurances” that an agreement will be reached. General Motors has owned Opel since 1929 and Vauxhall since 1925. PSA was formed in 1976 but Peugeot traces its car making roots back to the 1880’s. General Motors has had a strategic alliance with PSA since 2012 and the two parties regularly confer on ways to expand their collaboration.

GM Buick Regal 2017

Opel has provided the parent company with several domestic products over the years. The Cadillac Catera was based on an Opel sedan and was built in an Opel manufacturing facility in Rüsselsheim, Germany. Before GM’s Saturn division closed, it offered an Aura sedan based on an Opel product. The Opel Astra was also rebadged as Saturn. The Astra has been sold in Europe and in other world markets for a number of years. Currently, the Buick Regal is essentially a clone of the Opel Insignia sedan.

Opel and Vauxhall together employ hundreds of thousands of people and produce millions of vehicles each year. Unraveling the Opel/Vauxhall operations and transferring them to PSA would be a complex and time consuming task.

What would General Motors get out of it? It’s European operations have long been unprofitable. Opel and Vauxhall may sell millions of cars but they contribute very little to The General’s bottom line. There is another possibility. European regulators are holding auto makers’ feet to the fire when it comes to carbon emissions. It may be that GM simply has no stomach for the battle any more, knows it will need to invest billions to meet the new regulatory rules looming on the horizon, and decided to get out while it still can. This way, it will be free to build more Chevy Silverado 3500HD pickup trucks for its customers in America.

For PSA, it gets to become a much larger player in the European market and add several new models to its lineup. There is a big question, though, about how much of a technology transfer to PSA General Motors will be comfortable with. It reportedly had a deal in place to sell is European operations to Magna in 2009, but that deal came unglued over the question of technology transfer according to reports at the time. One thing PSA probably won’t get is the European version of the Chevy Bolt, which is be marketed on the Continent as the Opel Ampera-E.

Some think selling off its European operations will allow GM to give more attention to future mobility and self-driving technology. There is a general belief in the industry that just building and selling cars is not going to cut it in the future. The Holy Grail that everyone is chasing is a company owned ride sharing service that replaces income derived from sales with a revenue stream derived from rides who have ditched the conventional private automobile for a carefree life of hiring a car when needed via a smartphone app.

Perhaps GM is simply re-positioning itself for the car market that will be as opposed to the car market as it is today. As Wayne Gretzky liked to say, “I don’t skate to where the puck is. I skate to where it will be.”

Source: Autoblog

 

Steve Hanley

Closely following the transition from internal combustion to electricity. Whether it's cars, trucks, ships, or airplanes, sustainability is the key. Please follow me on Google + and Twitter.