PSA Boss Says He Has “No Regrets” Buying Opel

One year after getting the wheels in motion for purchasing the Opel brand, PSA Group chief executive Carlos Tavares says he has “no regrets” with the historic move.

Opel and its British equivalent, Vauxhall, were purchased from General Motors by the French conglomerate last year in a deal worth $2.7 billion. Considering Opel’s inability to make money under GM ownership, it was a risky move.

Speaking to Automotive News at the Geneva Motor Show, Tavares said the first positive results are now visible.

“We know we can turn around this company, and we are now seeing the first concrete results.”

Since taking ownership of Opel, PSA Group has managed to cut costs through new concessions with European unions while also sharing purchasing and other expenditures. Furthermore, PSA is shifting its technologies into Opel vehicles.

In the first six months of 2017, Opel lost roughly $460 million. Crucially, PSA Group has managed to slash those losses to $222 million in the last five months of 2017.

An analyst from LMC Automotive in London, Justin Cox, says PSA will see positive results from these changes quite rapidly.

“He’s in his research phase at the moment. He’s attacking costs, pooling purchasing power and leveraging engineering. Those are the kinds of things you can put in action right away, and you will see dividends quite speedily,” Cox said.

PSA wants Opel to have positive free cash flow and operating margins of 2 per cent by 2020, rising to 6 per cent margins by 2026, and annual synergies worth a cool $2.1 billion.

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  • Matthijs

    Would be stupid to say that he does regret it..

    • Bash

      Maybe he is in Denial stage.

      • Howstar

        like everyone that owns an Opel.

        • uS’gedlemba

          grrrrrrrrrrr!

  • GM arguably lost their car brand because of their preference of short-term profit over long-term stability. It’ll be interesting to see how the future works out for Opel / Vauxhall, particularly where they sit in the PSA hierarchy.

  • CADOX

    Cutting costs is one thing. Selling a moribund brand which more or less compete with 2 of your other brands is another.

    • uS’gedlemba

      There are markets where certain brands are stronger than others or where others don’t exist.

    • Bob White

      GM now has virtually nothing in Europe which is a huge portion of world markets.

  • Cobrajet

    GM should be regretting selling it.

    • they killed Chevy in Eu saying it was to focus on Opel… well they focused.

  • DanSemering

    give it a few months

  • They are big seller in their respective country. Not to mention potential export market that PSA is not present.

  • donny j

    Cant wait to see these here in the US

    • Liam Paul

      assuming it was not part of the deal that PSA would not sell opels here in the states but also I have not seen anything about opels coming to the states anytime soon

      • They can’t with the current lineup, not for some years, and have to provide GM with cars and car parts for Buick, that I don’t know for how long but I guess for some time.

      • donny j

        I read somewhere that they do plan to come to the states. I think it was on left lane news around the time of the buyout.

  • Not the same Scale but they want to be like VWag according to some journalists, Peugeot like VW, DS like AUDI, Citroën for SEAT and Opel like Skoda. But for now, Citroën, Peugeot and Opel kinda target the same people. In the future you could look at basicly the same car from PSA and choose the brand depending on you budget and brand affection and philosophy.

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