French automobile group PSA, which owns brands like Peugeot and Citroën, is in preliminary talks with General Motors to see whether it can merge its own activities with two of GM's brands, German Opel and British Vauxhall.
16 % market share
PSA confirmed both companies were in preliminary talks, but refused to give any additional information. There is already a collaboration when it comes to SUVs and monovolume cars, a leftover from a previous attempt to merge back in 2013. At that time, GM sold its 7 % in PSA.
The talks may lead to PSA's purchase of Opel and sources indicate we may learn more in the upcoming days or weeks. If approved, the newly-formed car manufacturer would get a 16 % market share in Europe, trumping Renault but still trailing market leader Volkswagen.
PSA could take full advantage of its increased size and acquire a lot of interesting technology. On the other hand, GM could entirely withdraw from the European market, where it never achieved much success. To make matters even worse, the Brexit has hammered the pound's value and that has also negatively impacted GM's profit.