The Opel-Vauxhall sale to PSA Group by General Motors means a major realignment in how the companies use their vehicle platforms.
Stephanie Brinley, senior automotive analyst of IHS Markit, explains:
BASED on our current IHS Markit production forecast, the sale of Opel-Vauxhall will shift about 1.0-million units of production in 2024, as Opel-Vauxhall products move to PSA platforms rather than to GM’s new vehicle set strategy (VSS) series of platforms.
GM will lose some anticipated production output for its upcoming VSS platforms, which may impact the ability to stretch costs across more units.
However, GM will also be able to reallocate research and development, engineering, manufacturing, and marketing investment once required for Opel to brands and regions that offer more potential for profit.
At the same time, the company retains the opportunity to sell what it lumps together as transformative technology – including mobility services, autonomous capability, and electrification – to the new PSA/Opel-Vauxhall organisation. For PSA, this option can speed access to new technology and, for GM, it can help cushion some of the R&D costs.
What are the scheduled product plans?
In 2017, production will be on GM’s Global Gamma/G2XX platform, Global Delta D2XX platform and Global Epsilon/E2XX platforms.
Opel also has products on a Fiat platform, leftover from the efforts to align those two companies, and offers commercial vehicles on a three-way project with Renault and Peugeot, the Movano and Vivaro. In the mid-term, these are all expected to move to PSA developed platforms.
In the mid- and long-term, these will evolve into platforms created by the new version of PSA/Opel-Vauxhall.
Prior to the sale, GM planned to move its Opel products to a series of new vehicle architectures known as Vehicle Set Strategy (VSS). Opel was due to use a series of VSS-F (front-drive) sets, in three different sizes (A, B/C and D/E), suitable for cars and crossover utility vehicles.
With a narrower range, Opel was forecast to only see products on three of the upcoming six GM VSS platforms. IHS Markit had forecast for Opel-branded production on the VSS platforms to reach 1.1 million units in 2026. All but about 4% of the 2026 production was expected to be at Opel plants in Europe. While the change does mean certain VSS architectures will support fewer units of production, the lost production was earmarked from facilities that GM will no longer have in its facilities footprint and will no longer have the liability of supporting.
This platform replaces GM’s Global Mini platform. Similar to VSS-F B/C, in the early years, Opel production had been forecast to account for a larger proportion of output on the platform. In 2021, Opel had been forecast to account for nearly 45% of VSS-F A. Production of the Karl had been planned to begin in 2021, at GM’s facility in South Korea, alongside a Chevrolet product. Though initially production had been forecast to be Opel-heavy, in later years, we had forecast that the Karl account for about 35% of the VSS-F A production at the South Korean plant.
Prior to the acquisition announcement, IHS Markit had forecast global volumes for VSS-F A would approach 425,000 units in 2025, with 51,500 for Opel and the rest for Chevrolet products. While the change will impact GM’s production allocation, Opel’s impact on the platform was forecast to peak in 2022 at about 66,000 units.
VSS-F B/C Opel products were planned to begin arriving in 2019CY, with Opel initially forecast to account for 40% of platform production in the early years. This new vehicle set strategy architecture will be used for B and C segment vehicles, replacing Delta in GM’s arsenal.
VSS-F B/C was a critical path to production vehicles for Opel-Vauxhall, prior to the sale. Among the vehicles once expected to move to VSS-F B/C were the Adam X, the Astra, the Corsa, the Mokka X and second-generation Crossland X and Grandland X. All of these products will be migrated to PSA platforms instead – though with several years of development left, it is possible for Opel to make a mark on the platform evolution.
As GM moves other brands on to the new vehicle architecture, Opel’s share of VSS-F B/C production had been forecast to drop to 17% in 2025. As with other transition, Opel plants in Europe were expected to provide only Opel volume. While the acquisition by PSA may change production plant locations, dropping Opel-branded VSS-F B/C products from GM’s production footprint has little effect on production plans outside of Europe.
GM’s D and E segment platform replaces the global Epsilon architecture. Opel had not been scheduled to move to this platform until 2024, with a new Insignia. Exposure for GM’s planning on the VSS-F D/E platform offers some of the least risk or impact.
While Insignia had been forecast to contribute about 156,000 units per annum to VSS-F D/E production (between 17% and 19% of production through 2026), the Opel production was confined to the Russelsheim plant. As that factory has been sold to PSA, it is also no longer part of the GM footprint. GM will not be required to update that plant for its future platforms. While the shift may impact the revenue generated from VSS-F D/E, it will also reduce some costs.
Potential impact on other GM brands
While the reduction in volume on the future versions of GM’s global architecture will have an impact on revenues, GM maintains that profitability will increase.
Largely, production and final development of Opel products has been separated from the rest of GM brands; Opel-Vauxhall products are built in plants that focus on those brands. Production of shared platform products for other brands is outside of Europe.
Buick and Opel have seen concurrent design and platform development for some key products, including Regal and Encore. However, production of the Buick-branded versions of these products has been independent of Opel-branded production. As a result, the development of GM’s remaining stable of brands is not expected to be impacted by the divestiture of the Opel brand.
What will PSA gain from GM’s mobility know-how?
GM is more heavily invested in personal mobility programmes, such as Maven and Lyft.
PSA is highly interested in working with GM for sourcing some of this technology. Specifically of interest is accessing fuel-cell electric vehicle technology through:
- The GM-Honda partnership;
- GM’s development of electrified vehicles in the Chevrolet Bolt (Opel Ampera-e); and
- GM’s development of autonomous technology, including GM’s Cruise acquisition.
However, PSA does also have EV and plug-in hybrid EV programmes in the works, and a mobility start-up called TravelCar.
For PSA, having access to this technology without bearing the full research and development (R&D) cost could be a terrific gain, particularly if the working relationship between GM and PSA has been positive.
For GM, being able to increase scale for its technology, without putting it into vehicles that are not profitable, there are also clear benefits.
The risk, however, is that no such deals are finalised as part of the sale of Opel-Vauxhall to PSA. Those issues will have to be negotiated separately; as many are either not commercialised or in infancy, it would have been difficult at best to include detailed agreements on this particular round of new technology.