Confirming long suspected rumors and speculation that such a deal was indeed in the works, GM officially revealed that it has sold both Opel and its British cousin Vauxhall to PSA (Peugeot-Citroen) ahead of the upcoming Geneva Motor Show.
The €2.2 billion sale marks the end of an era for GM, with the automaker completly leaving the European market after a decades long presence. While both Vauxhall and Opel had considerable history in the British and German markets respectively, they also transformed into a colossal money pit for GM in recent years, with both brands not being able to make a profit in the last sixteen years.
This is despite the shuttering of Chevrolet’s European sales division two years ago, which was supposed to give new life to lagging Opel sales, but ultimately failed to achieve the turnaround GM wanted.
GM revealed that it will still be involved with Opel via its rights to purchase warrants of PSA shares, which could resolve some issues regarding the use of GM technologies in the current lineup of Opel/Vauxhall models.
As for PSA, the French auto giant believes that it can return Opel to profitability by 2020 thanks to slashes in research and development costs, as well as the sharing of platforms and technologies across their portfolio of brands.
PSA CEO Carlos Tavarres, the man who helped Peugeot and Citroen rise from the brink of collapse a few years ago, is confident that he could pull the same feat for struggling Opel and its British sibling Vauxhall.
“We are confident that the Opel/Vauxhall turnaround will significantly accelerate with our support, while still respecting the commitments made by GM to the Opel/Vauxhall employees.” stated Tavarres in an online statement.
The U.S. market will feel some of the ripple effect from this action, since many of Buick’s product offerings like the Cascada and Encore trace their roots to Opel based products. GM revealed that PSA will continue to honor existing supply agreements with Buick and Australia-based Holden, but it could throw a sizable monkey wrench into plans for their next gen replacements, especially those currently on the drawing board.
That said, the next generation Buick Regal could provide an opprotunity for PSA to expand its reach into the U.S. market where its main Peugeot and Citroen brands still have a poor reputation among buyers, versus the more favorable history associated with Buick.
Finally, the deal was preceded by several minor collaboration efforts that took place back in 2012 when GM bought a seven percent stake in PSA. Several Peugeot-Citroen models are already built by Opel and vice versa, with the upcoming Citroen C3 Picasso sharing its components with the Geneva bound Opel Crossland X.