General Motors Co. has completed its reported $2.6-billion sale of the Opel and Vauxhaul businesses to French automaker Groupe PSA, calling it “a win for all stakeholders.” The transaction instantly makes PSA the second largest automaker in Europe, and stems ongoing losses for GM in the region.
Opel, headquartered in Hesse, Germany, designs and manufactures passenger vehicles, light commercial vehicles, and vehicle parts, for distribution in Africa, Asia, Europe, and South America. Its products include the Vauxhall brand in the U.K., Buick in the U.S., Canada, Mexico, and China, and the Holden brand in Australia and New Zealand.
Even with the sale, however, the Opel organization will continue to produce Buick-branded vehicles in Germany for General Motors for the foreseeable future.
GM has held a stake in Opel since 1929. In February 2012, Opel established a joint venture with PSA Peugeot Citroen, with GM taking a 7% share of PSA. This was intended to achieve cost savings through platform sharing, common purchasing, and other economies of scale.
The Detroit-based automaker recently indicated it lost about $800 million in Europe during the second quarter, including charges related to the sale. It has not posted a profit in the region for nearly two decades.
“We’ve taken another bold step in our ongoing work to transform GM,” stated GM president Dan Ammann. “This transaction allows us to sharply focus our resources on higher-return opportunities as we expand our technical and business leadership in the future of mobility.”
GM also is expecting to complete the sale of its GM Financial European operations to Groupe PSA and BNP Paribas later this year, subject to various regulatory approvals.
The sale of Opel and Vauxhall to PSA was first reported in February. For PSA, it gains full control of Opel from the joint venture it formed with GM in 2012, which never approached its ambitious plans to co-develop cars and vans.
The change in ownership also will clarify PSA’s future product development, for example allowing it to build future designs of the Opel Corsa on a common platform with the Peugeot 208 and Citroen C3 models, thereby allowing greater efficiency with higher volume production. "We are witnessing the birth of a true European champion today," stated PSA chairman Carlos Tavares said in a statement. "We will assist Opel and Vauxhall's return to profitability and aim to set new industry benchmarks together."
Opel announced a new leadership team, installing PSA executives in manufacturing and finance roles, and stated it plans a "much leaner" management structure to achieve economies of scale and synergies in purchasing, manufacturing and R&D.