France’s PSA Group, maker of Peugeot and Citroen cars, is in talks about taking over General Motors (GM) loss-making European business Opel. The PSA announcement comes a week after GM reported a loss of $257m from its European operations last year. That was the 16th consecutive loss-making year for GM in Europe.
“PSA confirms that it is exploring a number of strategic initiatives with GM with the aim of increasing its profitability and operating efficiency, including a potential acquisition of Opel,” said spokesman Bertrand Blaise.
Opel has been a problem for GM for decades. Once a serious rival to Volkswagen, it began losing market share in the 1990s, which was also the last time it made a profit. While the Volkswagen Group has become the world’s biggest carmaker, Opel slipped to Europe’s margins.
PSA is the European Union’s third-biggest automaker, with 9.9 percent of the market in 2016, according to the European Automobile Manufacturers Association. The purchase of Opel, which holds 6.7 percent of the market, would help the company vault past Renault into second place.