PSA Group were able to return Opel to profitability in record time

24 July 2018

Opel-Vauxhall has already started to bring income to the new owner

When in March 2017 PSA Group bought Opel and Vauxhall from General Motors, many twisted a finger at a temple: if the American giant could not make these companies profitable, then what is really the French, who are not in the best condition. But the skeptics were wrong: the PSA Group not only coped with the task, but introduced Opel and Vauxhall plus in record time.

It's hard to believe, but the last time Opel-Vauxhall has shown a profit in the last century — in 1999. After that, two related European brand remained dependents of General Motors, constantly generating losses. JPMorgan analyst Jose Azumendi noted that "the restoration of the Opel — simply the fastest in the automotive industry for many years."

The results of the first half of 2018 was for Opel-Vauxhall is a breath of fresh air: United company brought €502 million profit. At the same time in the last five months of last year, there was a loss of €179 million.

Example of the transition of Opel-Vauxhall is under the control of the PSA Group has no analogues: Opel (and Vauxhall) has long been considered "toxic" asset that even with the relatively good sales statistics able to bring the owner only losses. German brand owned by GM since 1929. In the 2000s, there were rumors that the brand are going to buy Sberbank and Magna, but in the end, the deal was thwarted.

Taking into account the return of Opel-Vauxhall to profitability all of the PSA Group was able to demonstrate a record profit for the half year: it jumped by 18 % to €1.48 billion. At the same time, the revenues of the carmaker increased by 40 %, to €38,6 billion. Amid such positive news, shares of PSA Group jumped by 11 %.