Opel buy boosts PSA in German, UK markets

Vauxhall is the No. 2 brand in the UK after Ford.

Photo credit: Reuters
Nick Gibbs is UK Correspondent at Automotive News Europe.
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PSA Group's purchase of Opel/Vauxhall from General Motors immediately hands it a valuable prize it didn't have before. PSA now has a sizeable share of Europe's two biggest car markets of Germany and the UK.

Buyers in the two markets don't buy cars from PSA's Peugeot and Citroen in any great volume. Last year in Germany, Europe's largest market, Peugeot was the 16th biggest brand and Citroen 18th. Opel was fifth behind VW, Mercedes, Audi and BMW.

In the UK, Peugeot finished eighth and Citroen 16th. Vauxhall was second after Ford.

PSA's acquisition of Opel/Vauxhall gives the French automaker an enviable market share. In Germany last year, PSA's share including the upscale DS brand was just 3.3 percent. Combined with Opel it would have climbed to 10.6 percent. In the UK last year PSA's share was 6.6 percent, but merged with Vauxhall’s that jumps to 15.9 percent.

Combining PSA and Opel sales last year would have given PSA a 16.8 percent share across Europe, bolstered in part by PSA's huge sales in France, where it has over a quarter of the market.

PSA CEO Carlos Tavares pointed out that country loyalty is strong among car buyers. "Some customers are just looking for German brands or for French brands, or for Asian brands. We recognize this," he said at a press conference on Monday to announce the Opel acquisition. Opel is seen as a German brand and Tavares said intends to preserve that. "Opel will remain a true German brand and Vauxhall will remain a true UK brand," he said.

The question is how profitable Opel/Vauxhall's sales are in France and Germany. In the UK, over half of Vauxhall's business come from sales to business fleets, including slim-margin daily rental sales. GM's desire to push numbers to the detriment of used values caused an internal argument that led to the departure of Vauxhall Chairman Tim Tozer in 2015. In Germany around 40 percent of Opel sales are registered to the dealers themselves, meaning they are sold on as nearly new at a discount.

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