Earlier this month, Groupe PSA became the second largest car manufacturer in Europe following its purchase of General Motors’ European operations through the acquisition of Opel and Vauxhall brands in a US$2.3 billion deal.
According to family shareholder Jean-Philippe Peugeot, the transaction will offer the French automaker greater scale in its pursuit of global expansion, Reuters reports. Speaking to German newspaper Welt am Sonntag in a joint interview with his cousin Robert Peugeot, Jean-Philippe Peugeot said the move will “allow the group to conquer the rest of the world step by step.”
He said that a PSA-Opel deal had been under deliberated upon even before 2012, when GM and Peugeot inked a deal to jointly develop some passenger car models, but the timing wasn’t right back then.
Robert Peugeot, chairman of PSA’s strategy committee, said the Opel/Vauxhall purchase will help the automaker obtain economies of scale by being able to manufacture three million vehicles in one core market. “All large carmakers have a volume of three million cars in one important market,” he explained.
He added that having Opel and Vauxhall in its brand portfolio will not undermine sales of Peugeot and Citroen models, stating that there was very little cannibalisation between the brands.
He said that Opel is strong in markets where PSA isn’t, citing the example of Germany, where Opel sells more cars than Peugeot, DS and Citroen combined. Meanwhile, Vauxhall sells more cars in the US than all three French brands altogether.
The group’s plans for expansion is also taking a global flavour. It has submitted a bid for a strategic partnership with Proton, announcing last month it was in talks with the Malaysian carmaker for a deal. It is reportedly going up against China’s Zhejiang Geely to become Proton’s partner, but a report early this month said that the Chinese automaker may pull out of negotiations.
Should PSA secure the partnership, it will offer access to Proton’s underutilised facilities to serve as a production and export base. This will help support PSA’s goal of expanding its presence in Southeast Asia (Thailand and Indonesia) – an area where where it has no manufacturing base – as well as other emerging markets.