Opel Returns Healthy Profit After 20 Years Of Losses With GM

After failing to turn a profit for two decades under the ownership of General Motors, Opel has reported a healthy 2018 profit after being acquired by PSA Group.

The German car brand and its UK sibling Vauxhall, turned a profit of 859 million euros ($979 million) in 2018. This is a remarkable turnaround considering Opel had a $204 million loss for the last five months of 2017 after PSA Group purchased the carmaker on August 1 of that year.

Not even PSA expected to turn Opel and Vauxhall into profitable brands this quickly. In fact, Opel had forecast a return to profitability by 2020, Auto News reports.

PSA is doing what GM couldn’t

In addition to its profit, Opel earned a 4.7 per cent return on sales of $20.9 billion in 2018, beating out VW which earned a 4.1 per cent return on its global sales in 2017.

In the years leading up to PSA’s purchase of Opel and Vauxhall, the two companies were on the road to recovery but even still, General Motors was eager to sell them off. In fact, it is reported that Opel would have reached its goal of breaking even in 2016 if the decision for the UK to lead the European Union hadn’t hurt business at Vauxhall.

PSA Group, led by chief executive Carlos Tavares, quickly cut 3700 manufacturing jobs across Opel’s German factories and also transferred 2000 jobs from Ruesselsheim, Germany to France when GM sold the duo. In addition, Tavares has focused on eliminating heavy discounting on Opel and Vauxhall models and has helped slash the Opel-Vauxhall inventory by 32,000 vehicles down to 195,000 vehicles as of December 31, 2018.

more photos...
  • Toronado_II

    Gm and Ford can’t manage european car maker. But why ?

    • designer_dick

      Differences in business culture.

      • Toronado_II

        Surely, but still…

    • Ilbirs

      Opel and Ford of Europe were kings when the respective U.S. headquarters weren’t as intrusive as we’re seeing on the last decade and a half. When Opel was allowed to be Opel this translated into great generations of Rekord, Manta, Omega, Kadett, Astra and Corsa, all of them very capable of going against models made by native European brands. The same applies to Ford of Europe and we just need to replace the models mentioned: Fiesta, Escort, Focus, Taunus, Sierra etc.
      Other problem is how American companies use to manage things: instead of correcting a problem at its beginning and steer the huge ship smoothly and way before hitting the iceberg, they prefer to act as if nothing is happening and then announce very drastic measures that revert on short term profits but compromise the long term future due to discontinuing some successful products due to bean counting and going out from important markets.

      • Toronado_II

        And don’t forget the Ford’s fiasco with Jaguar, Volvo and Aston Martin.

        • brn

          Ford’s fiasco with Jaguar? Jaguar poorly built a low volume of [beautiful] cars and was on the verge of going under. Thanks to Ford, Jaguar’s quality quickly rose to industry norms and their volume went up ten fold in just a few years.

          Sure, there’s odd things like the x-type, but if it weren’t for Ford, Jaguar wouldn’t exist. Tata is in the process of killing them however. Ford did amazing things with Jaguar. I wouldn’t call that a fiasco.

          • Tumbi Mtika

            “Tata is in the process of killing them however.”

            Yup. They were playing with house money.

          • Toronado_II

            That surely explain why the never make profit and sell them at a lower price !

      • Merc1

        “Other problem is how American companies use to manage things: instead of correcting a problem at its beginning and steer the huge ship smoothly and way before hitting the iceberg, they prefer to act as if nothing is happening and then announce very drastic measures that revert on short term profits but compromise the long term future due to discontinuing some successful products due to bean counting and going out from important markets.”

        Well said, and this exactly what GM is doing right now in the U.S. The problem is that the domestics are always in reaction mode, they are NEVER proactive with anything. They’re too slow or simply fail to identify market trends or buyer preferences until year years later. Their quality is still a questionable thing. They’re going now give up on cars in the U.S. handing all those buyers (still in the millions) over to Japan, Germany and Korea. They need to shed the unions and replace all current management. It just can’t and won’t ever be done though.

        M

      • Perry F. Bruns

        I’ve always been disappointed that the UK and Europe versions of Ford products were so much better than the ones sold in the U.S. My parents drove a U.S. Ford Granada, and it was a heap. It did last 25 years, but that was because it had the 302 and 4-speed manual powertrain, and Ziebart aftermarket rust protection. The AC was swapped out three times during the first year; the stock Firestone 721 radials rotted out shortly after; and the reverse gear synchro packed up after six years, taking my mother’s right shoulder with it.

  • Merc1

    Shows you how truly incompetent GM is.

    M

    • Jarosław Kotowicz

      Well said.

  • Ilbirs

    The problem of Opel/Vauxhall was called General Motors and I still suspect that there’s something untold about GM’s management, specially considering episodes like the sale of the Euro arm, closures of South African and Indian operations, closure of the Brazilian product development center, some rumors about the sale of Holden and, the most recent one, saying in U.S. that will keep its conventional passenger car lineup and just some weeks after this announcing the axe on Cruze, LaCrosse and other models.

    • Gustavo Adriano

      You forgot that imense case about SAAB that they also killed. 🙁

      • Ilbirs

        Yes, I can mention this, but I was focusing on the “new GM” (General Motors Company) period, despite it’s repeating some mistakes that we’d expect from “old GM” (General Motors Corporation), one of these being the end of SAAB.

  • Money money money

    So apparently the “socialist” minded French are able to run a more profitable company than those who have often claimed to being the best bet for capitalism…looking at you German-based factories and American run corporates.

  • donald seymour

    Can someone say ouch?

  • Giannis Antypas

    They fired people. 3700 manufacturing jobs across Opel’s German factories and also transferred 2000 jobs from Ruesselsheim, Germany to France.
    Profitability.

  • GM s noted for having The Reverse Midas Touch. This confirms it.

  • EyalN

    to many brands to one company. it’s like GM used to be.
    it’s going to be funny if they will start selling opel in the US

  • Well, the truth is that Opel always did really good but was drained by GM for other purposes. Just one example: almost all of the Buick models in China (the sole reason why the brand Buick still exists) were/are Opel based, and then you have Buick making profit, taking Opel’s R&D and just slapping a badge versus Opel doing all the heavy lifting and generating loss…
    So long, GM, and thanks for all the fish, may we never meet again.

  • SteersUright

    Step away from GM and you no longer need tax-payer moneys to succeed. Good for Opel. GM’s board should do a full clean sweep, CEO and all.

  • jfalckt

    Pretty remarkable, it seems that PSA are on a roll right now. I had my doubts about them purchasing Opel/Vauxhall, good to see them doing well without misalignment and bad decisions via GM.

  • Mr. EP9

    Of course it’s profitable, GM is a terrible company that is poorely managed. Opel is the perfect example of this as under 20 years of ownership they could not make a profit but then once PSA takes over, suddenly they’re in the black. If Saab got away from GM and into the right hands sooner, they might have still been with us.

    • Tumbi Mtika

      Oh Saab…

      An absolute tragedy.

  • Sovereignty

    GM was running Opel-Vauxhall at a loss for tax reasons. Everyone knows it was a hugely profitable business.

    • Jp

      Are you saying that GM preferred to lose money than to pay taxes? I am not an expert, but if all companies in the EU were doing that, I think we would know about it by now, no?

      • Sovereignty

        They weren’t losing money, but made it look like they were on their financial records. Companies do it all the time. No apparent profit = no tax.

    • EyalN

      Buick are selling Opel cars in China and the US as Buick.
      Opal invested all the money and Buick make the profit.
      I trust GM that they know how to make profit from going out of business

      • Sovereignty

        GM failed Saab, Pontiac, Oldsmobile, Saturn and Hummer. They failed to make Lotus profitable, which the Chinese are showing can be done. They’ve ditched Opel and Vauxhall, while Chevrolet no longer sells any cars in Europe, which means GM just sells a handful of Cadillacs there now. All that Mary Barra seems to be interested in doing is moving jobs out of the US. Mexico and China are her favourites.

  • Tumbi Mtika

    Wow.

    This pretty much says everything about how GM is run.

  • Ryan Wilkinson

    GM had a $9 billion dollar unfunded pension payment gap. PSA has none of these legacy costs and can therefore ttut a profit. It’s pretty straightforward. They would be in the same boat if they had to pay all of Opels retirees.

    • alexxx

      Excuses is all I see…
      But what do I know….

New Center Side Airbag Coming Soon To Hyundai, Kia And Genesis Models

Installed inside the driver’s seat, Hyundai’s side center airbag is designed to prevent front passengers from colliding with each other.

Scuderia Cameron Glickenhaus Reveals Its WEC Hypercar Series Racer

SCG’s brand new endurance race car sports a massive rear wing and will be powered by a hybridized, 3.0-liter twin-turbo V6.

DS 9 Fastback Uncovered In China As Rebadged, Luxed-Up Peugeot 508 L

The DS 9 is very closely related to its PSA stablemate, and will be available with a 200 HP, 1.6 turbo four as well as a plug-in powertrain.

2020 Honda CR-V Gains New U.S.-Built Hybrid Version, Drops Base 2.4L Engine

The new addition to the CR-V’s lineup uses a hybrid powertrain that consists of a 2.0-liter petrol four and two electric motors.

Car-Clueless Thieves Crash ’67 Ford Mustang Into Store To Steal Three Gaming Consoles

And the award for the dumbest thieves of the year goes to the ones who used a ’67 ‘Stang to steal… three PlayStations!.

Honda Skyroom Concept May Be Tiny, But It’s Loaded With Tech

The futuristic study is all-electric and fully autonomous and features a circular cabin dominated by… a large couch!.

Grand Cherokee Summit Launches In Australia As Most Luxurious Version Of Jeep’s SUV

The most plush 2019 Grand Cherokee available will set you back AUD $84,450, plus on-road costs, and comes with an extensive list of equipment .

Forget About The Nürburgring – The 2020 Porsche Taycan Looks Best In Its Natural Habitat

Porsche just dropped a big photo gallery showing the 2020 Taycan during its international media drive event in Norway.

Infiniti Q50 Drops The Turbocharged Four-Cylinder Engine, Goes V6-Only For 2020

Pricing climbs by $750, but the 2020 Q50 now comes standard with 300 hp.

UAW Strike Already Causing Ripple Effects As GM Forced To End Truck Production In Canada

A lack of part shipments could also force dealers to rely on deliveries from aftermarket companies such as PepBoys .