General Motors and PSA Group posted weaker European sales in January than any other major carmaker as they discuss a possible purchase of GM's European auto operations by PSA. Ivor Bennett reports.
It's good to have things in common if you're going into business. But this is probably not what Peugeot and Opel had in mind. Their latest sales growth figures the weakest of all major carmakers. Registrations at Peugeot parent PSA grew 6.5 percent last month. Opel just over 5 percent. A third of the growth Fiat Chrysler managed. No wonder, say analysts, GM are keen to sell. SOUNDBITE (English) NAEEM ASLAM, CHIEF MARKET ANALYST, THINK MARKETS, SAYING: "They wanted to get rid of this market. They wanted to get out of this part of the equation. They said 'ok let's do it'. So we think that deal is highly likely." If it does go ahead, many believe consolidation is equally likely. Earmarking Opel's UK affiliate, Vauxhall. SOUNDBITE (English) NAEEM ASLAM, CHIEF MARKET ANALYST, THINK MARKETS, SAYING: "It's a Brexit play right now. Why would you have a factory where you would employ 3500 people in a country that is not part of the euro zone, when you can do the same job back in Germany?" The issue of tariffs is yet to be resolved, fuelling doubts over the UK car market's competitiveness post-Brexit. Sales growth in Britain last month was the lowest of all the major EU markets. The 2.9 percent barely a quarter of what Germany managed. SOUNDBITE (English) NAEEM ASLAM, CHIEF MARKET ANALYST, THINK MARKETS, SAYING: "I know that people have been saying that 'yes, so far we have seen Brexit vote'. But that is the reality, we have only seen the Brexit vote. We haven't seen the effect of Brexit. These effects will very much kick-in after March." Neither PSA or GM has said what cuts would be made. But both British and German governments have voiced concerns, that could yet derail the deal.