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GM to Exit EU - Sale of Opel to PSA


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101 replies to this topic

#21 OFFLINE   7Mary3

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Posted 14 February 2017 - 05:03 PM

If GM acquired FCA, why wouldn't the result be a U.S. corporation?  It's all fun speculation, I really don't see it happening.  FCA is about 1/2 way through their long slide to oblivion.

 

I really don't see the proposed sale/merger of Opel as anything more than GM shedding a money-loosing operation that has little hope of a real turnaround.  And, if it happens I think it will prompt Ford to to take a long hard look at their European operations. 









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#22 OFFLINE   akirby

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Posted 14 February 2017 - 05:16 PM

 

The benefit?  World-wide name recognition.  And big profits.

 

It's difficult to say how profitable Jeep is on its own.  And then you get into the debate about overlapping products.  It could probably work but may not be the best investment.



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#23 OFFLINE   fuzzymoomoo

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Posted 14 February 2017 - 05:57 PM

 
It's difficult to say how profitable Jeep is on its own.  And then you get into the debate about overlapping products.  It could probably work but may not be the best investment.

GM is already the king of overlapping products, what's a few more?

What? What happened?


#24 OFFLINE   akirby

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Posted 14 February 2017 - 07:47 PM

GM is already the king of overlapping products, what's a few more?


The question was about Ford buying Jeep, not GM.

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#25 OFFLINE   fuzzymoomoo

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Posted 14 February 2017 - 07:57 PM

The question was about Ford buying Jeep, not GM.

got it. I must have missed something

What? What happened?


#26 OFFLINE   jasonj80

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Posted 14 February 2017 - 08:05 PM

The US would never allow a GM/FCA merger. To much market share in Key segments and way to many job losses. It would take all of North America into a deep recession.

#27 OFFLINE   AGR

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Posted 14 February 2017 - 08:40 PM

None of this makes even one tiny bit of sense. A company that is overly Euro-dependent with high labor costs, two mass market brands and a weak upmarket presence would become more dependent on Europe, have a third mass market brand(Opel and Vauxhall are essentially one brand), and even higher labor costs.

GM in the US would add two weak car brands needing substantial investment, two truck brands that replicate the two that they already have, minus the Wrangler...and they already have a Wrangler fighter under development(rumored). And they would trade Opel/Vauxhall, which have at least a semi-decent reputation, for Fiat...



#28 OFFLINE   rmc523

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Posted 14 February 2017 - 08:57 PM

When's the last time GM has done anything that made sense?
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#29 OFFLINE   bzcat

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Posted 14 February 2017 - 10:30 PM

So a couple of things to put it all in perspective

 

1. Europe is increasingly isolated in term of automotive market trends. Like JDM, the core European market tastes and demands are different than the rest of the world - premium A-cars and wagons do not sell anywhere besides the dozen or so western European countries.

 

2. GM has redundant engineering centers in Detroit, China, Korea, Brazil, and Australia to pick up the slack if Germany is not part of the picture.

 

3. Of the key models in the line up using global platform, GM already sells more Buicks than Opel: Encore > Mokka, Verano > Astra, Regal > Insignia

 

4. Opel is already working very closely with PSA on new models that are being counted to deliver better profit margins, namely the CUVs: Crossland X = rebadged Peugeot 2008, Grandland X = rebadged Peugeot 3008

 

What does all mean? GM can afford to cut loose Opel and it probably won't have a big impact on any economy of scale issue. Europe is a no growth zone for GM so investing in the market, which requires unique regional specific models is less attractive than investing in growing markets that have common needs/that are trending the same direction. GM's play is really interesting here because it signals a fundamental shift in thinking... it is EXACTLY like Ford's exit from Japan but obviously at a much bigger scale.

 

PSA's play is different. They want to build up Europe into a fortress because they are a regional car company. They are not using this as a way to enter US market. Since Europe is on a flat or downward trajectory, you want to be no worse than #3 there. Merging PSA and Opel will accomplish this goal. It's the same idea as Nissan grabbing Mitsubishi and Toyota putting Mazda and Subaru on the short leash to fortify JDM.

 

Right now, I don't think the deal will go thru because there is too much to unwind. For example, PSA will not want to continue Opel's commercial vehicle partnership with Renault. And it's an open question whether PSA has the ability to pull off the deal. The French Govt is onboard but Dongfeng holds the purse string. What does Dongfeng get out of this deal? Nothing right now. In fact, allowing PSA to be more powerful/entrenched in Europe is a risky bet for Dongfeng. It means it is less likely to share advanced tech and platforms in China.

 

If the deal does go thru, I see GM re-introducing Chevy to Europe in the short term. I don't see GM buying FCA. Anyone smart enough can see that time is FCA's biggest enemy. If you want any FCA assets, you don't want to make a bad deal with Sergio. You wait until the banks are in charge and they will swiftly make sensible deals. Buick will be just fine... the most profitable models are not shared with Opel anyway, and the shared models all have existing Chevy twins.


Edited by bzcat, 14 February 2017 - 10:32 PM.

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#30 OFFLINE   twintornados

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Posted 15 February 2017 - 06:05 AM

I am left wondering if a Chinese "Knight in shining armor" will ride in a buy up Opel from under PSA....Geeley comes to mind.Opel and Volvo in a European juggernaut to win the hearts and minds of the Euro car buying public.


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#31 OFFLINE   akirby

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Posted 15 February 2017 - 08:31 AM

got it. I must have missed something

 

tbone said he would love it if Ford bought Jeep.



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#32 OFFLINE   akirby

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Posted 15 February 2017 - 08:31 AM

When's the last time GM has done anything that made sense?

 

Canyorado?  Although at the time we all thought they were crazy.



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#33 OFFLINE   J-150

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Posted 15 February 2017 - 09:49 AM

When's the last time GM has done anything that made sense?


Anytime they copy Ford...
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#34 OFFLINE   J-150

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Posted 15 February 2017 - 09:55 AM

I am left wondering if a Chinese "Knight in shining armor" will ride in a buy up Opel from under PSA....Geeley comes to mind.Opel and Volvo in a European juggernaut to win the hearts and minds of the Euro car buying public.


Under that rationale, Tata could also benefit.
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#35 OFFLINE   rmc523

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Posted 15 February 2017 - 11:50 AM

 

Canyorado?  Although at the time we all thought they were crazy.

 

Well, can we apply the old adage that a broken clock is right twice a day here?

 

---

 

For every Canyorado, theres the SSR, Aztek, Solstice, Sky, etc.


Edited by rmc523, 15 February 2017 - 12:15 PM.

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#36 OFFLINE   akirby

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Posted 15 February 2017 - 12:24 PM

 

Well, can we apply the old adage that a broken clock is right twice a day here?

 

---

 

For every Canyorado, theres the SSR, Aztek, Solstice, Sky, etc.

 

Yep



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#37 OFFLINE   bzcat

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Posted 15 February 2017 - 12:51 PM

Under that rationale, Tata could also benefit.

 

If GM is soliciting offers for Opel, Tata would jump all over it. They need to volume to sustain losses in JLR.



#38 OFFLINE   mackinaw

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Posted 15 February 2017 - 12:52 PM

I get that GM has lost 20 billion dollars on Opel since the late 1990's.  But why they would walk away from a 14 million vehicle market baffles me.



#39 OFFLINE   rmc523

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Posted 15 February 2017 - 12:54 PM

I get that GM has lost 20 billion dollars on Opel since the late 1990's.  But why they would walk away from a 14 million vehicle market baffles me.

 

I refer you to my post #28 above...


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#40 OFFLINE   jasonj80

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Posted 15 February 2017 - 01:07 PM

I get that GM has lost 20 billion dollars on Opel since the late 1990's.  But why they would walk away from a 14 million vehicle market baffles me.

When you look at their sales though it isn't pretty, 40% of their sales in Germany are to dealers, who then discount more and sell the car. It is a smart move on GM's part, they should have sold them when they had the chance 8 years ago. Just because the market is big doesn't mean you can compete in it. Look at Nissan in the full size NA truck market, millions of units sold each year but have been in the market for 15 years and still can't move any meaning full volume.










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