PSA previously confirmed it was in talks with General Motors but indicates its dealings with Opel and Vauxhall have recently centered on the possible expansion of current projects.
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The benefit for PSA would be improved economies of scale as well as access to Opel’s engineering resources and technology, according to Bloomberg’s source.
General Motors’ decision to court PSA as a buyer for its Opel and Vauxhall brands comes as the German automaker continues to struggle to return to profitability.
Selling Opel will mean GM no longer seeks to be a key player in all the major auto markets, but rather is focusing on cash flow and profitability instead of sales volume. Negotiations on valuations are ongoing.
GM has endured years of losses at Opel, its main brand in Europe. This also could help PSA achieve its goal of bringing some form of Citroen, possibly the sub-brand DS, back to the USA market within the next decade. “The purchase would give them capacity in Germany, one of the most expensive countries to produce cars and would lead to excess capacity”.
If it does go ahead the combination of PSA’s existing company assets – which also include the Citroen and DS brands – and General Motor’s operations would create an automotive giant which would control around 16% of the European auto market.
Peugeot – which also controls the Citroen marque – is part-owned by the French government, which holds a 14pc stake after a state bail-out deal.
As a result, several SUV and MPV models made by the manufacturer shares components and production facilities with PSA Group manufacturers, but the buyout is still big news.
But it said “There can be no assurance that an agreement will be reached”.
Barra has underlined the company’s commitment to Opel several times in recent years.
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Chief executive Carlos Tavares has returned PSA to profit by focusing on fewer, more lucrative models.
