Peugeot sets sales and savings goals for Opel deal: sources

Wed Feb 22, 2017 2:47pm EST
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By Pamela Barbaglia, Arno Schuetze and Gilles Guillaume

LONDON/FRANKFURT/PARIS (Reuters) - French carmaker PSA Group (PEUP.PA: Quote) expects its planned acquisition of General Motors' (GM.N: Quote) Opel division to lead to combined sales of 5 million vehicles by 2022 and save as much as 2 billion euros ($2.1 billion) annually, sources said, adding that a deal could be finalised in early March.

PSA also plans to make swift progress on technical convergence with GM's European arm, bringing new Opel models such as the popular Corsa mini onto the Paris-based manufacturer's own vehicle architectures to reduce duplication, two people with knowledge of the matter said on Wednesday.

Paris-based PSA and GM confirmed last week that they were in negotiations over a PSA-Opel tie-up to create Europe's second-largest carmaker by sales after Volkswagen (VOWG_p.DE: Quote).

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.

The targeted savings between 1.5 billion euros and 2 billion euros will come mainly from purchasing and research and development, the sources said, as vehicle platforms and engines are pooled.

A PSA spokesman declined to comment on the deal talks or the French carmaker's objectives.

The sales goal of 5 million vehicles, to be reached between 2020 and 2022, represents a 16 percent increase on last year's combined 4.3 million deliveries by PSA and Opel. It may be viewed as ambitious, with the European auto market now approaching a peak.

The future of Opel's sales financing arm and 7 billion euro pension deficit is still under discussion, two sources said.   Continued...

A Peugeot car drives past the logos of French car maker Peugeot and German car maker Opel at a dealership in Villepinte, near Paris, France, February 20, 2017.   REUTERS/Christian Hartmann