Chinese Interests Kill Opel-Peugeot Deal, Endanger Opel's Already Shaky Future

GM is backing out of plans to share the Opel Insignia platform with its partner PSA, says Der Spiegel. It was planned that PSA will build a mid-sized Peugeot and Citroen with next gen Insignia underpinnings. The cars would have been made at Opel’s Rüsselsheim factory. Together with the Opel model, the cars would have filled the available capacity. Scratch that plan. It wasn’t killed because it was a bad idea. It was killed because Buick and especially GM China complained, says the magazine.

With the deal sacrificed to Buick sensitivities, the Rüsselsheim plant is left with way too much capacity, Opel executives told Der Spiegel. The managers also question where the sense of any cooperation with PSA may be.

An Opel spokesman, contacted by Reuters, did not want to comment on model plans, but played down expectations that a final deal would include shared manufacturing.

“It would be premature to assume that anything had been agreed upon before and has now been reversed,” the spokesman said, adding that discussions were continuing with an emphasis on cooperation in purchasing, logistics and product development.

If the story is true, then the deal most likely has been torpedoed from China alone. Neither Citroen nor Peugeot sell in the U.S. and won’t compete with Buick here. In China, PSA has a joint venture with Dongfeng, and a new one with Changan. Both central government-owned companies are bitter rivals of Shanghai-owned GM joint venture partner SAIC. Eventually, those mid-sized Peugeots and Citroens would be be made in China.

The way it looks, Opel’s future may have become the victim of internecine Chinese politics, which gain way too much influence on GM. Volkswagen handles its Chinese joint venture partners much better. There would have been loud laughter in Wolfsburg if China would have tried to influence European model politics.