PARIS -- PSA Group expects its planned acquisition of General Motors' Opel/Vauxhall division to lead to combined sales of 5 million vehicles by 2022 and save as much as 2 billion euros ($2.1 billion) annually, as talks advance towards a likely deal in early March, sources told Reuters.
Savings will come mainly from purchasing and research and development as the PSA pools vehicle architectures and engines with GM's European business, eliminating duplicate technologies, the sources said on Wednesday.
PSA plans to make swift progress on technical convergence, bringing new Opel models such as the Corsa subcompact onto the Paris-based automaker's own vehicle architectures to slash duplication, two people with knowledge of the matter said.
Exane BNP Paribas analyst Dominic O'Brien said savings of 2 billion euros could be achieved with 1.2 billion euros from joint purchasing, 400 million from r&d and another 400 million from the eventual elimination of 6,000 jobs.
"The most obvious starting point for any restructuring of course lies with labor," O'Brien said, adding that layoffs would be more likely "via attrition and voluntary rather than compulsory."
PSA and GM confirmed last week that they were in talks over a PSA-Opel tie-up to create Europe's second-largest carmaker by sales after Volkswagen Group. The disclosure sparked concern for the future of GM's Opel and Vauxhall plants in Germany and Britain, home to most of the group's 38,000-strong European workforce.
Discussions with political and labor leaders may delay the conclusion of a deal, which both carmakers now hope to announce in March, two sources with knowledge of the talks also said.
PSA boss Carlos Tavares is due to meet British Prime Minister Theresa May after giving assurances on Tuesday to German Chancellor Angela Merkel that all existing GM job guarantees would be honored under the deal.
GM's existing German job guarantees run to the end of next year and plant commitments until around 2019-20, unions say.
The new group would have 75 billion euros in revenue and a 16 percent combined European market share, which shrank last year as both groups lost ground to rivals including VW and Renault.