Opel will continue to post losses until 2020 despite being acquired by PSA

PSA believes that Opel, which is in the process of being acquired by the French group, will increase its losses in 2017, a trend that could continue until 2020. The company’s CEO, Carlos Tavares, made these statements following the deficit reported by Opel in the first quarter of the year.

“Opel has achieved great things under the leadership of General Motors, but the losses are real,” Tavares told shareholders at PSA’s annual general meeting held in Paris last Wednesday. The chairman admitted that Opel has been very positive for GM, as it helped boost sales at the American company.

Furthermore, Tavares has assured that with the purchase of Opel, PSA will reduce the cost of producing its vehicles and expand the activity of its research department. Despite this, the group will suffer losses in 2017.

Last March, the French manufacturer agreed with General Motors to acquire Opel in a deal valued at 2.2 billion euros, of which 900 million corresponds to the financing division, which will be acquired in equal parts (450 million each) by PSA and the French bank BNP Paribas. At its Paris meeting, PSA shareholders approved a share bond issue worth 650 million euros, which will represent a capital increase of around 4.4% and will finance 36% of the acquisition.

During his speech at the annual meeting, Tavares pointed out that the purchase of Opel will make them a “European champion”, as the PSA Group would rank as the second-largest carmaker (behind Volkswagen) on the old continent. “With these changes, PSA will hold a 17% market share,” the CEO stressed.