Opel climbs out of the red under Mother PSA’s wings
Under Mother PSA’s wings, German car maker Opel/Vauxhall climbs out of the red for the first time in years with an operating profit of 502 million euro in the first six months of 2018.
The French PSA group (Peugeot-Citroën-DS-Opel) itself saw its turnover shoot up with 40,1% to 38,6 billion euro and sold 2.181.800 cars. Net profit is 1,5 billion euro, 18% more than the same period last year.
Better than expected
“Again, we’re doing better than everybody expected”, PSA financial director, Jean-Baptiste de Chatillon, says. “After years of losses the recovery of Opel/Vauxhall has clearly started now and is proof of its potential, in spite of all predictions. And this is just the beginning. They now have to continue to improve performances to reach the same level as the group.”
Before the takeover by PSA, under General Motors, Opel/Vauxhall accumulated losses year after year with still an operational loss of 179 million euro in 2017. The average operational margin is now for the first time up to 5%, compared to 8,5% for the rest of brands of the PSA group. For the whole group the margin went from 7,4% in 2017 before the take-over, to 7,8% now.
Regain profitability by 2020
Six weeks after the take-over of Opel by the French, PSA boss, Carlos Tavares, said he was betting on the “highly motivated staff of Opel being the solution and not the problem on the road to profitability”.
Concrete plans – called PACE! – were unveiled after 100 days, in November, by Opel’s CEO, Michael Lohscheller, to regain profitability by 2020 as demanded by PSA. Without “forced redundancies and while keeping all plants open” Opel promised to cut costs by 700 euro per car, among others, and to go all the way in synchronizing with PSA for efficiency. It looks like this plan bears fruit sooner than hoped.