LONDON/FRANKFURT/PARIS (Reuters) - French carmaker PSA Group (PEUP.PA) expects its planned acquisition of General Motors’ (GM.N) 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).
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.
Exane BNP Paribas analyst Dominic O‘Brien earlier said that savings of 2 billion euros could be achieved with 1.2 billion euros from joint purchasing, 400 million euros from R&D and a 400 million euros from the eventual elimination of 6,000 jobs.
“The most obvious starting point for any restructuring, of course, lies with labour,” O‘Brien said in a note to clients, adding that layoffs would be more likely “via attrition and voluntary rather than compulsory”.
PSA said its Chief Executive Carlos Tavares had a “constructive discussion” with British Prime Minister Theresa May on Wednesday, repeating assurances given to German Chancellor Angela Merkel a day earlier that any existing GM commitments to unions would be honored.
GM’s current 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 (RENA.PA).
Additional reporting by Edward Taylor in Frankfurt and Laurence Frost in Paris; Editing by Alexander Smith and David Goodman