Report indicates that General Motors Company (NYSE:GM) has entered in negotiations with Peugeot in effort to save Opel. The negotiations are directed towards sale of Opel to the French based caremaker.

Opel continuous losses

GM however, declined to comment further about the gig that was made public a fortnight ago. Opel has continuously lost to Peugeot for almost 16 years consecutively. Dialogues are ongoing according to GM CEO. Despite efforts to improve the business sales, it has deteriorated over the years. The firm is exploring new ventures to try and save the company.

GM affected by tax laws?

Some sources have indicated that the new imposed tax reforms could have affected Opel adversely leading to the continuous losses. The CEO commented that the carmaker supports the corporate tax reforms. She also hinted on a Republican “border adjustment” tax proposal that if caution is not taken, unwanted consequences could occur. The tax proposal involves a 20% tax on imported goods followed by a write-off for the exported goods. Automakers have raised concerns indicating that US built vehicle consist of an incredible significant number of imported parts.

A deal so soon?

GM opted not to discuss any timelines. Sources from Europe are concerned tha GM could have tackled PSA sooner. Peugeot and GM have confirmed the ongoing talks. They hope to come up with a strategy that will form Europe’s second largest carmaker in terms of sales after Volkswagen AC. Some reports  have indicated that a deal will be arrived at as soon as next week.

The failed venture

The companies have tried before to join their small cars in 2012 during the unsuccessful failed venture of ‘global strategy alliance’. They later fell back to three shared projects from the initial forty shares. A German based Magazine had reported that GM had agreed to selling licenses of Opel cars manufacture to Peugeot. In return, Peugeot was to sign to an agreement not to sell the vehicles in China, Russia or North America.


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