Vauxhall join with Peugeot-Citroen 0

The European car market is currently in serious crisis with Vauxhall and Peugeot Citroen taking a huge hit. Both European mass car makers could join forces in order to help each other ride the storm.

Vauxhall, a General Motors owned company were reported in France to be joining with the French automakers. The deal would see General Motors owning 30 per cent in the joint business which would see them pump in £6.2 billion into future products.

For the past 12 years General Motors have been making a loss in Europe. The UK Ellesmere plant was under threat of closure earlier this year. Vince Cable met face to face with Dan Akerson to negotiate keeping the plant open which managed to do the trick. That hasn’t stopped job cuts and the plant reducing its working days to only four per week following a lack in demand.  There are concerns that this factory could be closed if the combined deal was to go ahead. Work could be divided between France and Germany.

General Motors have been discussing a number of strategies to conquer their European woes. This included pondering on whether to close Vauxhall’s sister company Opel. Neither Vauxhall nor Peugeot-Citroen has yet to make a comment on the rumours.

Although the deal would be ideal for both companies, the French automotive industry as well as the European car industry as a whole; there are complications which threaten to halt the deal. The French Government may object the merger according to various sources.

General Motors are set to lose around £1 billion by the end of 2012. Last year they were forced to withdraw their original break even estimate, which caused embarrassment to the company. Peugeot Citroen is in the same boat, losing £161 million a month.

If the Peugeot-Citroen Vauxhall deal was to go ahead, this would open doors for plenty of money saving opportunities.  Many platforms would be able to be shared, helping to save money on the developments and costs.

The deal is at early stages with plenty more needed to be discussed. It is very unlikely that the Peugeot-Citroen Vauxhall deal will get the go ahead before the end of the year.