General Motors says it could no longer continue to be profitable in Europe with the changing market demands and regulatory requirements, following the sale of Opel and Vauxhall to PSA Group.

Speaking to the Australian media at the Geneva motor show today, the president of General Motors, Dan Ammann, confirmed the challenges facing the American giant in Europe were too much.

“We are at about 1.2 million units in Europe. We have some scale but we don’t have nearly as much as scale as some of our competition,” Ammann said.

“We have brought the business over the last five years, from a pretty tough spot to a much better place, but as we look forward over the next few years, the regulatory environment, the changing consumer taste and so on in Europe, there was an increasing amount of Europe-unique development that was required.

"And, as we looked at the amount of investment that was required to do that and putting that over a million unit business, it becomes more and more challenging.”

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The sale of Open and Vauxhall to PSA signals a near-pullout of General Motors from the European market, though the brand retains a strong equity position with its new European partner and will continue to share product back and forth.

“We have had good successes already in working with PSA in some of these co-development opportunities so it felt like a natural way to explore how we could take advantage of that further.

"So we can get more scale, and so when we are solving a regulatory problem that’s unique to Europe we are doing it over three million units instead of one million units. So that was what was really driving this, a lot of unique European requirements and getting those in a much more efficient way."

GM and PSA will also continue to share technology such as electrification and autonomous driving going forward.