Will Vauxhall join Opel and Peugeot-Citroen 0
Break even hopes dashed
Vauxhall are in need of assistance following poor sales in 2011 when compared to rivals. They are one of General Motor’s most disappointing brands of last year, contributing to great losses. The European division of the company have failed to break-even after the company originally projected that they could, only to withdraw their anticipations late in the year.
Combination on production
It may have come as a surprise to some, but this would be a fantastic deal for the automotive industry. Both companies may work together on elements such as gearboxes, engines, parts and development of technology. As Vauxhall have a great of production capacity, it is likely that the two will combine in the actual production of cars.
Job security for many at Vauxhall’s Ellesmere factory, which was under General Motors scope to be closed, will make the UK motor industry more secure.
Talks already started
Talks were apparently on going for the very first time on Tuesday the 21st of February. This information was revealed by close sources to the press.
European operations need to improve
Both European car manufacturers are currently making a loss. As mentioned earlier General Motors are so disappointed with the performance of Vauxhall and Opel alike that a complete drop of the brands and closure of plants has been discussed, as no profit has been made for over 12 years. General Motors did manage to conquer all last year and end up as the world’s number one car producer, beating stiff competition from Volkswagen. If the company’s European operations were stonger, there would hardly be any competition.
A deal can help both parties
A potential deal will see both improve and discover eventual profit. That would be main reason for the companies to merge. It sounds like a great idea at present, with both seemingly heading for further poor performances this year. Something has to be done to revive the Opel and Vauxhall brands.
No export market
At present neither company has an export market outside of Europe. With the Euro Zone crisis, the auto market in the region is suffering from poor sales. If cars are not being sold beyond Europe, then prospects will be bleak for both companies.