GM sells European business to Peugeot for US$2.3 billion
GM`s European brands – Opel in Germany and Vauxhall in Britain – have not made a combined profit in the past 18 years.
General Motors is selling its unprofitable European car business to France`s PSA Group, the maker of Peugeot, for 2.2 billion euros (US$2.33 billion).
GM`s European brands – Opel in Germany and Vauxhall in Britain – have made the Detroit-based automaker a player in the world’s third-largest auto market since the 1920s; but they have not made a combined profit in the past 18 years despite multiple turnaround efforts. Opel recently recorded its 16th consecutive full-year loss.
The acquisition will transform PSA Group, which makes Peugeot and Citroen cars, into Europe’s No. 2 automaker after Volkswagen, and ahead of its French rival Renault.
In a statement, Carlos Tavares, the CEO of PSA Group, said the deal was “a game-changer” for PSA. “We’re confident that the Opel-Vauxhall turnaround will significantly accelerate with our support,” he said.
GM will keep its manufacturing centre in Turin, Italy. GM and PSA will continue to collaborate on electric car technologies and maintain existing supply agreements on some Buick models.
Western Europe is the No. 3 auto sales market, behind China and the U.S. Opel and Vauxhall last year sold just under 1.2 million vehicles, amounting to only 5.6 per cent of the market, according to GM.