General Motors had been struggling to make money with its two European subsidiaries for years, despite Vauxhall, in particular, enjoying some sales success and improving reputation in the lucrative UK market in recent years.
Globally General Motor was in a bad way for some time, closing down or selling off some of its most beloved brands to consolidate its core business, including the demise of Pontiac, Saab, Oldsmobile and Saturn. As recently as 2014, the large PSA Group was in similarly poor financial health, with threats of wide-scale factory closures and battles with its many French factory unions.
However, where GM failed, and continues to fail, ultimately having to be bailed out by the Obama government, the PSA Group restructured its senior management team and sold a stake of its business to the French government and its strong Chinese Dongfeng affiliate.
PSA’s plans worked, with the French group’s balance sheet now liberally sprinkled with black ink. You might imagine that PSA would now want to rest on its laurels, having pulled itself out of the jaws of danger. But no. The day before the annual Geneva Motor Show opened its doors to the press one month ago, the French automotive giant proved the late-2016 rumours about acquiring GM’s European division to be true and not just fake news.
PSA paid GM 2.2billion Euros for the Opel and Vauxhall brands, with the full takeover due to be in place by the end of this year, giving Groupe PSA a combined European market share of around 17 per cent with c.4.5million combined vehicle sales, placing it second behind the Volkswagen Group, and ahead of its arch rival, the Renault-Nissan Alliance.