The PSA Group, which makes Citroën, DS and Peugeot cars, has completed its purchase of the Vauxhall and Opel brands.
Final details on carrying across and combining the companies' financial arms, Opel Bank, Opel Financial Services and Vauxhall Finance, with collaboration from financial giant BNP Paribas. The newly acquired financing company of Vauxhall and Opel will sit alongside the existing PSA Financing arm, Banque PSA Finance. Around £8.4billion of finance was tied up in the Vauxhall and Opel financing companies at the end of last year.
The £1.9bn deal consists of GM’s Opel/Vauxhall subsidiary and GM Financial’s European operation, valued at £1.2bn and £800m respectively.
The move, which was first announced in March, makes PSA the second-biggest-selling car group in Europe after Volkswagen. Enlarged PSA now has a 17% share of the European market.
Following the announcement this morning, PSA said it will present a detailed business plan for Vauxhall and Opel in early November and added that the intention was to return to the two brands to profit. Last year, they lost £200m. In a statement, PSA said its intention for Vauxhall and Opel was to "generate a positive operational free cash flow by 2020 as well as an operating margin of 2% by 2020 and 6% by 2026". Four PSA executives will join the Opel leadership team, which is led by chief executive Michael Lohscheller.
There is no word on the future of Vauxhall's two UK factories in Luton and Ellesmere Port. A Vauxhall spokesman told Autocar it was "business as usual" at the moment.
PSA Group boss Carlos Tavares said: “We are witnessing the birth of a true European champion today. We will assist Opel and Vauxhall’s return to profitability and aim to set new industry benchmarks together. We will unleash the power of these iconic brands and the huge potential of its existing talents. Opel will remain German, Vauxhall will remain British. They are the perfect fit to our existing portfolio of French brands."
Lohscheller said Opel is "eager to build the [business] plan with PSA’s support", and added that the economies of scale and synergies in purchasing, manufacturing and R&D could help the new group to save an estimated £1.5bn each year.
A much leaner management structure will be implemented, said Lohscheller: "We are reducing complexity and increasing spreed. I am looking forward to shaping the next chapter of Opel/Vauxhall with the new management team and leading our company into a successful future. The owners and the employees will not be the only ones to benefit from ever stronger Opel and Vauxhall brands – our customers will do so too.”
This confirmation follows the announcement last month that the European Union's antitrust authority “unconditionally approved” PSA’s plans to buy Opel and Vauxhall, concluding that “the transaction would raise no competition concerns”.
Join the debate
Add your comment
Vauxhall, British?
Hasn't been british since 1925.
Plan
One possibility for the new company is to market the five brands in a similar fashion to the way VAG markets Audi, VW, Seat & Skoda. Vauxhall, as the unknown brand in Europe, could become the no-frills (Skoda) brand, with DS occupying the other end (Audi). Opel could be branded as the sporty side with Peugeot & Citroen maintaining their present positions. The benefits of platform and component sharing, reducing development and production costs, it might make sense. The issue of over supply is something that will eventually take a toll on one or all manufacturers, something I'm sure they are all aware of.
GM - no presence in Europe
Chao continues at GM: this leaves them with no presence in Europe, one of the world's largest markets. By what management logic is that a good idea? Oh, and the Insignia - engineered by Opel - is one of GMs biggest sellers in China, badged as a Buick, in part trrading off it's German engineering. Where will the replacement be engineered?