Vauxhalls and Opels are now Peugeots and Citroens

PSA buys out GM’s loss-making European arm, adding yet another mainstream brand to its stable

PSA has bought the Opel and Vauxhall brands, their whole range of cars, and a group of plants all across Europe that build cars and powertrains. For that it paid about £1.1bn. Together with bank BNP Paribas, it also bought Opel’s bank, which lends people money to buy and lease the cars. That part of the deal earned GM another £800m.

The deal is all about the benefts of being bigger. Combined current sales of Opel and Vauxhall to Peugeot and Citroen and DS make the new entity the number two car conglomerate in Europe, behind only the multi-brand VW Group. So GM in Detroit has found a way to be rid of its European arm, which has lost money for 15 years.

The logic is this: all the group’s cars will go onto a combined set of platforms and powertrains. This spreads the enormous costs of R&D and production tooling across more vehicles. It also reduces purchasing costs per vehicle, because the new bigger entity would be buying parts in bigger numbers and could negotiate lower prices.

Like the VW Group, the individual brands put on their own skins and interiors and tuning and specs, and sell them through separate dealers. But PSA and GM are already doing much of that. At Geneva, Vauxhall and Opel launched the Crossland X. This is a small but roomy family crossover that shares a platform, powertrains and production line with the next Citroen C3 Picasso. Later this year there will be the Grandland X, which is a rebodied Peugeot 3008. These co-operations were set up four years ago when the companies were separate.

PSA CEO Carlos Tavares is talking about savings by bringing expertise into Vauxhall and Opel factories. He points out that after he joined PSA, its breakeven point dropped by 1 million cars a year. It was, to be fair, an amazing turnaround. Problem is, Vauxhall’s British Ellesmere Port plant and Opel’s Rüsselsheim operation are already very efcient. So big savings will come only after those plants start building cars on common PeugeotCitroen-DS-Opel-Vauxhall platforms.

The other problem is, having fnally managed to put some space between Peugeot and Citroen, can Tavares fnd room in people’s minds for Opel and Vauxhall too? Part of it, he says, is about the perceived nationality of the brands. “Some buyers don’t want a French car,” he said. “Some want a German car, just as some want an Asian car. People buy cars from a brand not a group.”

And what of GM? Well, it’s almost universally held that for a maker to prove itself capable of making good cars – as opposed to pickups and big SUVs – it has to go toe-to-toe with Europe’s best, in Europe. We fear the days of lazy Detroit crapboxes, the Nineties Chevy Malibus and Oldsmobile Achievas that drove GM to bankruptcy, might fnd a new echo. By pulling out of Europe, GM paints itself as a can’t-do company