Following Ambassador, Peugeot set to acquire Opel, Vauxhall

Ferrari 812 Superfast will add lustre to a mediocre group of new cars in Geneva

The two companies had been bickering about who should be responsible for footing the bill.

Reports suggest that business secretary, Greg Clark, has held phone conversations and face-to-face talks with both GM and PSA Group executives in recent weeks and prime minister, Theresa May, has also raised the matter with the French prime mister and PSA Group chief, Carlos Tavares.

Both GM and PSA, which owns the Peugeot and Citroen brands, declined to comment.

Around 4,500 employees work in Vauxhall UK production sites of Ellesmere Port in Cheshire and Luton.

Opel had hoped to return to profitability by 2016, but the slide in sterling following the European Union referendum last June contributed to its 257m euros annual loss.

Acquiring Opel also means that PSA will become the owner of the Vauxhall brand in Great Britain, which has prompted widespread concern over potential job cuts.

"All the western carmakers have been making their money in the Chinese market these past few years", said Marc Staudenmayer of the Advancy management consultancy.




In a bid to protect its Buick and Chevrolet brands, GM has not allowed Opel to expand outside Europe.

"Opel wasn't allowed to do that, which explains its underperformance since 2005".

GM reported a loss of $257m (£209m) from its European operations last year - its 16th straight year of losses. Detroit-based GM, which came close to selling Opel to Magna (MG.TO) in 2009, has faced investor pressure to offload its struggling European arm and focus on raising profitability rather than chase the global sales crown now held by VW.

One of the key negotiating points is how PSA can achieve about 2 billion euros (S$2.972 billion) in savings from a deal, said one of the people.

Carlos Tavares on February 23.

The acquisition offered an "opportunity to create a European auto champion" and quickly exceed 5 million annual vehicle sales, Tavares told analysts as he presented full-year earnings.

Detroit-based GM has been pressing for a deal barring those legacy Opel models from markets including China, Russia and Latin America, sources have said.

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