PSA’s Opel Assessment: “This Company Needs Help”

CEO Carlos Tavares, whose PSA Group hopes to finalize a deal next month to acquire Adam Opel AG from General Motors Co., tells reporters a merger would exploit the market appeal of Opel’s German engineering.

Tavares also believes he can apply the same turnaround strategy he employed at PSA to reverse Opel’s 17 consecutive years of losses. “This company needs help,” he says of the GM unit.

A merger would propel PSA into second place behind Volkswagen Group in European market share. Last year PSA trailed second-place Renault Group by about 50,000 sales in the region, according to trade group ACEA. Sales by Opel and its Vauxhall brand totaled 993,500 units.

Tavares also says having a German marque will help PSA in unnamed markets where “we have customers who will not consider a French brand.” He has emphasized in talks with German government and labor officials that a post-merger Opel would operate independently under its current management team and labor agreements.

He confirms an interest in relaunching Opel in overseas markets. Under GM management, the brand was confined to Europe as the American company sought to promote its Chevrolet brand elsewhere.