Members of the Peugeot family have revealed more of the rationale behind the PSA Group’s purchase of the bulk of GM’s European operations, including Opel and Vauxhall.
Reuters reports that Jean-Philippe and Robert Peugeot sat down for an interview with Welt am Sonntag, and presented further thoughts on the 2.2 billion euro ($3.1 billion) deal.
Robert Peugeot, chairman of the PSA Group’s strategy committee, said, “All large carmakers have a volume of three million cars in one important market”.
Once PSA’s takeover of Opel/Vauxhall is completed, it’s estimated that the combined automaker will have a combined European market share of around 17 per cent, second behind the Volkswagen Group’s 24 per cent.
With its larger share of the European market, the PSA Group hopes to wring out improve economies of scale. At the announcement of the deal, the automaker estimated that there would 1.7 billion euros ($2.4 billion) of annual savings by 2026, and that Opel should be profitable by 2020.
Although Opel, Vauxhall, Peugeot and Citroen are all mass market brands, Robert Peugeot says that “there is very little cannibalisation between the brands”. For example, in both the German and UK markets, Opel/Vauxhall both out sell Peugeot, Citroen and DS combined.
Jean-Philippe Peugeot added that the purchase of Opel/Vauxhall will allow the French automaker to “conquer the rest of the world step by step”.
It’s not clear if the deal between GM and PSA contains a non-compete clause. Rumours ahead of the deal’s signing indicated that PSA would be barred from selling vehicles based on GM platforms outside of existing markets and in competition with GM’s remaining brands.
Currently Opel operates in Europe and South Africa, so there is potential for it to expand into China, Asia and Latin America.
At present, the Peugeot family owns 13.68 per cent of the PSA Group. Unlike the French government and Chinese car maker Dongfeng, both of which also own 13.68 per cent of PSA, the family controls 22.19 per cent of the company’s voting rights.
The deal to buy Opel and Vauxhall is expected to be closed towards the end of 2017, barring any unforeseen regulatory or legal issues.