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Giant

Peugeot-Citroen to buy Vauxhall/Opel

http://www.autocar.co.uk/car-news...sale-vauxhall-and-opel-brands-psa

Seems odd to a non industry expert like me. GM lose the economies of scale created by rebadging Opels/Vauxhalls/Holdens/Buick/Chevys across the world and Peugeot gain a brand sitting in the same space in the same markets as their existing ones.

Am I looking at it wrong?
Tim

I don't know how Opel are seen on the Continent but could this be a way of PSA getting a brand they can move a bit upmarket?

Vauxhall might bite the dust or become rebadged Peugeot/Vauxhalls.
JohnC

In a post Brexit world it would give the French access to a UK manufacturing plant and allow them to use exchange rate differences to their advantage by exporting from or importing to the UK as rates dictate. It also gives them some stability in the UK market.
PhilD

Grow and buy up others is what car manufacturers do isn't it?
Giant

PhilD wrote:
Grow and buy up others is what car manufacturers do isn't it?


But generally by gaining strengths in different areas, combine the good bits of both. To me PSA and Vauxhall offer similar quailities in the same areas of the market. Same strengths, same weaknesses.
Twelfth Monkey

As PSA has frequently tried to move parts of their ranges upmarket, I'd have thought that doing a VW and buying in that arena would have made more sense.
Bob Sacamano

I would have thought PSA had no need for extra capacity - they have enough difficulty keeping their existing plants busy.

Is Opel/Vauxhall really upmarket from Peugeot? I would have thought pushing the Citroen/DS brand as the technology/upmarket brand and Peugeot as the mainstream would have been the way to go.
Racing Teatray

I smell badge-engineering ahead. I.e. doing what VW does – building a range of mechanically identical but subtly different cars aimed at different niches and price points which can be mixed and matched in any given market depending on local demand. That way if British sales of French brands continues to thin out, that's compensated by healthy Vauxhall sales. Likewise, if Opel struggles in eg France or Italy, it can be offset by healthy sales of the French brands.
Big Blue

Racing Teatray wrote:
I smell badge-engineering ahead. I.e. doing what VW does – building a range of mechanically identical but subtly different cars aimed at different niches and price points which can be mixed and matched in any given market depending on local demand. That way if British sales of French brands continues to thin out, that's compensated by healthy Vauxhall sales. Likewise, if Opel struggles in eg France or Italy, it can be offset by healthy sales of the French brands.


This looks the likely idea behind this move to me, too.

French brands aren't especially strong in Germany, but in some sectors are very strong in the UK whereas they're piss-weak in others over here. They're particularly weak in the 3-series alternative market which they might see the Insignia as taking.
Michael

If an agreement included supplying GM with compact models to sell in the US then I can see it being a useful access to the North American market.
PhilD

Giant wrote:
PhilD wrote:
Grow and buy up others is what car manufacturers do isn't it?


But generally by gaining strengths in different areas, combine the good bits of both. To me PSA and Vauxhall offer similar quailities in the same areas of the market. Same strengths, same weaknesses.


VW springs to mind, as Racing explains well.
PG

For PSA, this can only be about doing a VW and using the same platforms across multiple brands. But that begs the old adage - you know where you want to get to but you wouldn't choose to start from where you are. It could be years before the platform synergies bear fruit and they need less factories as well.  

Also, both the German and French car markets are very nationalistic.

Top brands in Germany - PSA in 16th, 17th and 30th place.
http://www.best-selling-cars.com/...y-best-selling-car-brands-models/

Whereas in France - PSA 2nd, 3rd and 15th.
http://www.best-selling-cars.com/...-manufacturers-brands-and-models/

So would a French built Astra/308 badged as an Opel suddenly be bought by all and sundry in Germany? I doubt it.

And even worse for PSA, can you imagine a German built Astra / 308 badged as a 308 stay as popular in France? Hell no.  

And as for Ellesmere Port and the Luton van factory, well PSA have form there when they shut Ryton. The French government will have their fingers all over the deal (they are a shareholder in PSA after all) to secure French jobs and close factories in the UK and Germany.
Bob Sacamano

Michael wrote:
If an agreement included supplying GM with compact models to sell in the US then I can see it being a useful access to the North American market.


Already most of the Buicks are re-badged Opels - the popular Buick Regal is an Insignia, they get the Cascada, the Buick Encore is the Mokka and the Verano is based on the Astra.
PG

Bob Sacamano wrote:
Michael wrote:
If an agreement included supplying GM with compact models to sell in the US then I can see it being a useful access to the North American market.


Already most of the Buicks are re-badged Opels - the popular Buick Regal is an Insignia, they get the Cascada, the Buick Encore is the Mokka and the Verano is based on the Astra.


Which makes me wonder why GM would want to sell Opel in the first place? Surely their real opportunity has to be in more global platform usage rather than cutting off Europe as they see it as a problem.

Or maybe they want to get rid of Opel so that Cadillac can finally become successful in Europe.  
Racing Teatray

PG wrote:

Or maybe they want to get rid of Opel so that Cadillac can finally become successful in Europe.  


I know that Caddys and Corsas alike are beloved of old dears, but surely it's a stretch of the imagination to think that the market for Opels in Europe is compatible with the market for Cadillacs?
PG

Racing Teatray wrote:
I know that Caddys and Corsas alike are beloved of old dears, but surely it's a stretch of the imagination to think that the market for Opels in Europe is compatible with the market for Cadillacs?


I hope you saw the big red sarcastic light flashing?

But seriously (there it goes again), GM managed to stretch their imagination to believe that Cadillac would be a success the two times they've tried so far. Perhaps they've never read Einstein's theory on madness?
gooner

I wonder if GM just don't get the European obsession with small cars and with profits falling want to focus on what they do best. The top end Opel model, the Insignia, is about the only car they can sell in the states as the low selling Buick Regal.

I still can't see what is in it for PSA right now, the Astra and 308 are such tight competitors that bringing both under one brand will just lead to two models cannibalising sales off one another, but as has already been said, perhaps there's a longer term plan to do what VAG has done with their brands.
Michael

Bob Sacamano wrote:
Michael wrote:
If an agreement included supplying GM with compact models to sell in the US then I can see it being a useful access to the North American market.


Already most of the Buicks are re-badged Opels - the popular Buick Regal is an Insignia, they get the Cascada, the Buick Encore is the Mokka and the Verano is based on the Astra.


I'm aware of that which is why GM may want the arrangemt and effectively outsource the production so they don't have the burden of factories.
Bob Sacamano

Michael wrote:
Bob Sacamano wrote:
Michael wrote:
If an agreement included supplying GM with compact models to sell in the US then I can see it being a useful access to the North American market.


Already most of the Buicks are re-badged Opels - the popular Buick Regal is an Insignia, they get the Cascada, the Buick Encore is the Mokka and the Verano is based on the Astra.


I'm aware of that which is why GM may want the arrangemt and effectively outsource the production so they don't have the burden of factories.


I find it hard to believe that the French can build Buicks cheaper than GM's Chinese Buick plants.
Chris M Wanted a V-10

I  thougt it was reasonably well known that GM just don't understand the European market (witness what happened to SAAB)and have been looking to off-load Vauxhall-Opel for a long time.  The only slight surprise to me is that it's PSA who are the leading contenders to purchase GM's european perations
JohnC

Maybe The Donalds levy on imported cars was the final nail in the coffin, if it was going to cost another 20% to 25% to bring in a car from Europe or China. Or maybe GM will start to build PSA cars in USA under licence.
gonnabuildabuggy

Giant wrote:
PhilD wrote:
Grow and buy up others is what car manufacturers do isn't it?


But generally by gaining strengths in different areas, combine the good bits of both. To me PSA and Vauxhall offer similar quailities in the same areas of the market. Same strengths, same weaknesses.


Same here, no business sense to me unless sold dirt cheap. Skoda and Seat purchases had a lot of sense in terms of acquiring failing businesses at cheap prices and gaining low cost manufacturing plants.

I can only assume:

1. PSA Exec have an elevated view of their business performance
2. It might be a way of adding sales that they are incapable of doing organically due to poor product/image.
3. GM might be offloading cheap due to Donald's threats?

I point out the success of BMW's purchase of Rover many years ago as an example of how well this might go.......
Humphrey The Pug

Chris M Wanted a V-10 wrote:
I  thougt it was reasonably well known that GM just don't understand the European market (witness what happened to SAAB)and have been looking to off-load Vauxhall-Opel for a long time.  The only slight surprise to me is that it's PSA who are the leading contenders to purchase GM's european perations


Was just about to post something similar.

I believe Opel loses money for GM and they have been trying to offload it for a fair while now, someone was looking to buy them a few years ago, however I can't remember who.
Tim

I wonder how this deal would sit with the EU given that France bailed PSA out within the last 2 years - doesn't that count as state aid (I know the French don't give a shit about that sort of thing when they're the ones doing it).
Big Blue

Looks like our views are in good company...

http://sniffpetrol.com/2017/02/15...g-identical-company/#.WKRrE7GcY1g
BeN

I read somewhere that this effectively means that GM are giving up on Europe and focusing on their home market of America, as well as emerging markets like China etc where they have a huge presence.

But it is of course interesting because other GM brands like Buick and Holden are pretty intertwined with Opel now, so what will become of them? One theory is that Buick will become more 'China-fied' with models developed in China and exported, but Holden's future is up in the air.
gonnabuildabuggy

"nterestingly, a GM Europe / PSA merger would create Europe’s second largest car maker, and the biggest when measured by thin interior plastic consumption."
BeN

It is done:

http://www.autocar.co.uk/car-news/industry/vauxhall-PSA-Group-takeover
Chris M Wanted a V-10

^ Subject, no doubt, to EU politicians approving it
Bob Sacamano

This will not end well.
Nice Guy Eddie

No, I can't see this as good news at all.
Tim

Maybe Peugeot will keep at least one of the UK factories open to produce cars for us and then it MIGHT make sense to focus all their right hand drive production in that place too?
PG

Nice Guy Eddie wrote:
No, I can't see this as good news at all.


Agreed.

French nationalistic company, part owned by the French government, buys German and UK loss making operation (allegedly although how much of that loss is internal accounting makes me suspicious) with view to making savings and efficiencies through platform sharing and supply chain simplification etc, and vows to keep all non-French factories open.

Oh look, there's a flying pig......
Tim

I'm trying to ignore the French nationalist part although I expect they'll do whatever it takes to protect themselves at home.

Also how can this deal go ahead given Peugeot had financial assistance from the French government in the recent past - I thought all that stuff was meant to be banned by the EU, hence why RBS were going to be selling off a lot of their other-branded businesses?

Obviously I know that the French only choose to follow the rules that suit them but this is a massive deal.
Michael

My plumber just turned up in his Vauxhall Vivaro which is also sold as a Renault Traffic I think? I wonder how that sort of arrangement will work in the future.
PG

Tim wrote:
Obviously I know that the French only choose to follow the rules that suit them and the EU allows them to do that, whereas for the UK (like Rover or TATA steel for example) the EU always say "non", but this is a massive deal.


added a key bit to your post.
Bob Sacamano

Michael wrote:
My plumber just turned up in his Vauxhall Vivaro which is also sold as a Renault Traffic I think? I wonder how that sort of arrangement will work in the future.


Second generation Vivaros and Trafics were built at Vauxhall's Luton plant. The third generation saw Trafic production moved away from Luton to Sandouville in France. High roof versions of Vivaros have now moved there as well. I think we all know where this is going.
gooner

I guess with the potential for import tariffs on products being sold between the U.K. and the EU, the next gen Astra and 308 could share a platform and be both be built at Ellesmere Port for RHD markets and France for EU sales.

But as others have said the French are very nationalistic so will favour French production over U.K. Production. They will be looking to close some Opel factories but many of those are in Germany who will press hard to avoid their factories being the ones that are sacrificed.
Giant

Michael wrote:
My plumber just turned up in his Vauxhall Vivaro which is also sold as a Renault Traffic I think? I wonder how that sort of arrangement will work in the future.


Also sold as Nissan Primastar and FIAT Talento. Presumably the next Vivaro will be a rebadged Boxer/Jumpy
Giant

PG wrote:
Nice Guy Eddie wrote:
No, I can't see this as good news at all.


Agreed.

French nationalistic company, part owned by the French government, buys German and UK loss making operation (allegedly although how much of that loss is internal accounting makes me suspicious) with view to making savings and efficiencies through platform sharing and supply chain simplification etc, and vows to keep all non-French factories open.

Oh look, there's a flying pig......


How do they break down development costs? GM Europe developed the Astra, Insignia etc, which were then sold in Australia as Holdens, Asia and the  Americas as Buicks and Chevys. Same with engines. So does each unit sold regardless of badge or part of the world bear a proportion of the development costs, or (as I suspect) the European arm foot all the development costs and the other arms look massively profitable?
Grampa

I'm sure there must be some rationale for this - last time they bought an American-British car company, the cars just disappeared after a while - but I can't see them wanting to do the same again.

Isn't the new Vauxhall crossover model (I forge the name now) a joint Opel/PSA project?
Dr. Hfuhruhurr

I think Ellesmere Port's best hope is being bought by JLR to handle increased demand
Giant

There was mention of having a U.K. plant could avoid import tariffs on PSA/Opel vehicles if Brexit goes hard, is this in anyway likely, or just nice line to spin for ellesmere employees for now?
PG

Dr. Hfuhruhurr wrote:
I think Ellesmere Port's best hope is being bought by JLR to handle increased demand


I read that too. Halewood that builds the Evoque and Discovery Sport is working almost flat out and with the Jaguar E-Pace on the same chassis, I presume it is also to be built at Halewood (somehow).

In which case this could be a very good solution to take over a nearby factory.

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