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Used carmaker

A deal sparks talk of car-industry mega-mergers

PSA buys Opel as GM exits Europe

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PSA must have calculated that $2.3 billion is a profitable price for Opel. The sad reality is that PSA has no better avenue to spend $2.3 billion.

As the article said, Europe is now the most competitive automobile market in the world. Ordinarily, an European focus automaker would devote its resources on making better cars and improving efficiency, so it may compete better in Europe, and may be even outside Europe. Buying Opel may give PSA more market share in Europe for a little while, but in the long run, success can only come from product and service excellence. Not sure how the purchase of Opel would give PSA any long term competitive advantage.


The need of mega-mergers within the industry is somewhat misguided. With the phasing out of the internal combustion engine, the industry is about to lose its most important know-how and advantage of scale they built for many decades. In other words the barrier of entry is about to reduced drastically.

On the other hand, automotive suppliers do themselves large chunk of R&D – at the end the carmakers are buying their technologies off the shelf. No wonder we are seeing the emergence of a myriad of small scale manufacturers and that most mainstream brands struggle to differentiate themselves.

We could be at the late cycle of a growth period, and I’d say both FCA and PSA are at the low end of the food chain if the brown stuff hits the fan. The industry will be certainly disrupted, but not in the organized way most auto execs imagine.


Interesting news. However, it would appear that most of GM's non-truck design is Opel-based (in the USA and Canada). Also, what becomes of Australia's Holden subsidiary, whose products are also Opel-based?

gorkbird in reply to Oreg

Models like the Chevrolet Cruze and certain Cadillac models are still based on Opel architecture. However, having said that, it would appear to me that there is some futility to the merger insofar as while the North American market will still be petroleum-fuelled - at least for the next decade, the story is much different for the Asian market, where pollution concerns- particularly in India and China - would dictate the need for more battery-powered vehicles. I believe the same is true for Europe, where diesel is fast losing popularity due to Volkswagen's (and possibly PSA's) poor handling of diesel emissions, and air pollution problems, also due to diesels' emissions.

Kremilek2 in reply to ssyy

It is an interesting gamble. Maybe PSA thinks that it could sell Opel outside of Europe and market it as a German car. Otherwise serious cost cutting would be inevitable since Opel is not a technology leader in the field.