A leading automotive expert believes a deal would benefit both Jaguar Land Rover and PSA.

The surprising move has been suggested by a leading US automotive expert, who claims it would make sense for both the Coventry car maker and French firm PSA, which recently bought Vauxhall from US car giant General Motors.

Richard Truett, a columnist for the global trade magazine Automotive News, believes it could be a ‘win-win’ for both parties.

Earlier this month PSA, which owns the Peugeot and Citroen brands, acquired Vauxhall/Opel in a £1.13bn deal.

Mr Truett believes PSA would be best hanging on to the European-based Opel side of the business but offloading British-based Vauxhall.

He also believes that Jaguar Land Rover would be the perfect candidate to take Vauxhall forward and that it would help the car maker achieve its aims of doubling sales to more than a million vehicles a year.

The move might also have the benefit of securing jobs at Vauxhall, allaying fears PSA might ultimately shut UK production facilities as part of a cost-cutting programme.

Mr Truett said Jaguar Land Rover was “on a roll” since 2008 and added: “JLR’s turnaround, from a money-losing business Ford dumped for $2.3 billion, at a huge loss, to India’s Tata Motors, is one of the industry’s biggest success stories of the last decade.

“But now the next – and far more difficult – challenge awaits – growing annual global volume to one million vehicles, a goal of JLR’s hard-charging German CEO, BMW-trained Ralf Speth.

“Perhaps the best opportunity to do that quickly and affordably has appeared with General Motors’ sale of its money-losing Opel and Vauxhall brands to France’s PSA Group.

“JLR should approach PSA about buying Vauxhall, a brand consisting of mostly rebadged Opel vehicles that is available only in the United Kingdom.”

Mr Truett said while Jaguar Land Rover sales should top 600,000 this year, passing the one million mark will prove more difficult.

He says new vehicles in the pipeline, including a new Land Rover Defender and smaller Jaguar and Land Rover SUVs/crossovers, will only add “incremental sales”.

“Adding Vauxhall to JLR’s corporate garage makes sense for JLR and PSA,” he said.

“The real prize in the GM deal was Opel, which alone accounts for about a million vehicles a year.

“Opel’s volume can help PSA lower production costs by spreading technology, platforms and components to Opel vehicles.

“Vauxhall will add little to PSA, except perhaps engineering costs to develop variations of Opels for the UK.”

With annual Vauxhall sales in the UK of around 250,000, Mr Truett believes it could offer the perfect platform to build on.

He added: “JLR, with a mainstream brand such as Vauxhall, could expand into new segments and markets in which neither Jaguar nor Land Rover can compete.”

Mr Truett also likened Jaguar Land Rover to BMW, saying: “JLR is beginning to look a lot like a sort of British BMW.

“But even BMW has a hedge against economic turmoil with its Mini brand, and it would not surprise me to see JLR eventually launch a non-luxury brand that helps it expand globally.

“Vauxhall gives JLR a chance to do that with an established, functioning brand, instead of resurrecting a dead or damaged brand or trying to create a new one.”

Comments

comments