Suddenly, your next Holden Commodore will be French

Monday, 6 March 2017

Next-generation Commodore is an Opel; PSA says existing supply agreements will continue.

It's official: your 2018 Holden Commodore will be French. Well, kind of.

PSA Group (Peugeot/Citroen) and General Motors (GM) have announced a deal for the French group to purchase GM's Opel/Vauxhall operations for €1.3 billion (NZ$1.96b).

GM will continue to licence platforms for current models, like Astra, to PSA.

The deal includes Opel/Vauxhall's six assembly and five component-manufacturing facilities, an engineering centre at Russelsheim in Germany and approximately 40,000 employees.

It has particular relevance for Holden, which has Opel playing a key role in the expansion of its product portfolio beyond the end of Australian manufacturing in October this year.

The next-generation Commodore due in 2018 is an Opel model, the all-new Insignia, as is the just-launched Astra hatchback.

The joint PSA/GM statement says that short-to-medium term supply arrangements will not change: 'GM will also participate in the future success of the combined entity through its ownership of warrants to purchase shares of PSA. GM and PSA also expect to collaborate in the further deployment of electrification technologies and existing supply agreements for Holden and certain Buick models will continue.'

GM is a former shareholder of PSA (2012-14) and the two groups have been collaborating on SUVs for Europe, including the Opel Crossland X and Grandland X.

While all PSA and Opel vehicles will now ultimately share platforms, it's unlikely there will be any change to the 2018 Commodore and current Astra as we know them. The Insignia/Commodore is a clean-sheet model that has been signed off but not yet launched, while Astra was only released in Europe two years ago.

The PSA/GM statement says that 'Opel/Vauxhall will continue to benefit from intellectual property licenses from GM until its vehicles progressively convert to PSA platforms over the coming years.'

The difficulty for Holden will probably come beyond current model cycles, where it may lose the close co-operation and influence it currently enjoys in tailoring Opel product for Australasian customers.

The irony of the local situation will not be lost on Holden NZ executives: the Aussie brand was number three overall here last year and outsold the Peugeot and Citroen brands (combined) by 14-to-one.

But in Europe, PSA is a giant. The acquisition of Opel deal makes the newly formed group the second-largest automotive concern in Europe, with a 17 per cent market share (Volkswagen is number one).

For PSA, the deal gives it a significant boost in volume and assimilates a rival brand that occupies very similar market territory. Combined, the companies will make huge savings in research and manufacturing.

For GM, it releases a loss-making brand that is often seen as being far too focused on Europe.

Peugeot's net profit increased by 79 per cent in 2016 and there are hopes that it can also help turn Opel around - although many believe that may be achieved by restructuring and cutting non-French jobs.

The PSA/GM transaction is still subject to regulatory approval, but is expected to close before the end of the year.