Monday, 6 March 2017

Peugeot-Citroen Buys Vauxhall-Opel From GM, More Confusion To Ensue


Just a few days after I wrote about the muddle PSA is making of its Citroen and DS brands the French car company has announced that it will be buying Vauxhall-Opel from GM. The brands have produced badge engineered versions of Opel designed cars for half a century, with the occasional Holden making its way from Australia to liven things up a bit.

Sp aside from the untangling the marques from their US owner, PSA has given itself more badges to try and manage.

The problem for PSA looks to me like a lack of hierarchy in its structure. Currently Peugeot and Citroen badge almost identical versions of the same car and sell it into the same market segments. Ditto Vauxhall and Opel. The new DS brand has no history or loyal following, nor can it lean on the quality associations of its parent company to help build a premium image in the same way that Toyota managed with Lexus.

Looking at VW and FCA you can see how a hierarchical structure should work. Skoda - Seat - VW - Audi - Porsche - Lamborghini - Bentley has an almost linear progression from budget to super premium. Fiat - Chrysler - Alfa Romeo - Jeep - Maserati - Ferrari works almost as well for the Italians.

PSA appears to have given itself access to additional factories, as well as another pair of badges to glue to the front of some very bland hatchbacks. Let's face it the progression from Peugeot - Vauxhall - Citroen - Opel - DS just doesn't work.

Whilst I've been predicting a shakeout in the car market for a while its hard to see how this amounts to a heap of value for PSA. Vauxhall is own-brand cornflakes in the UK and unknown abroad. Opel's German roots should make it a more exciting propostion but it lags against all its major rivals. 

A trip through the Vauxhall-Opel back catalogue is enough to cure the worst case of insomnia and even manages to make Ford's look thrilling. Barring the occasional low volume special, Vauxhall-Opel cars have had all the kerbside appeal of a house brick.

For GM it's a €2.2bn windfall it will accept with no qualms. Vauxhall-Opel hasn't made a profit in nearly two decades. For workers at plants around the Europe this may be the precursor to some rather sleepless nights.

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