- A Vauxhall logo (credit: carlogos.org)

Why did GM sell Vauxhall?

Why would a massive car conglomerate, sell one of its major companies to its competitor?

5w ago
9.3K

As I have written before, General Motors is not the most popular company. And for good reason, they make horrible decisions, and have screwed over their consumers and workers. But one thing they did that I never understand was selling Vauxhall, and Opel for that matter. Upon doing some research, I believe I have found the answer to why GM sold such a famous car company.

Financial troubles played a significant part in the reason for the sale of Vauxhall to PSA, the parent company of Citroen, and Peugeot. According to a 2017 article from the BBC, Vauxhall hadn't turned a profit since 1999. This would help explain why GM would sell a famous company such as Vauxhall. After all if a company is no longer profitable, why would it be kept? Well regardless of this, Vauxhall was still a high-selling brand in the U.K. and had to potential to turn a profit for GM.

2005 Vauxhall Vectra (credit: CarGurus)

2005 Vauxhall Vectra (credit: CarGurus)

But GM, being GM couldn't turn a profit with such a well-known company. And just rebadged other GM cars and sold them as Vauxhalls. This of course impacted Vauxhall's sales in the U.K. Consumers were not impressed by this, and as a result Vauxhall has suffered since 1999 and was unable to turn a profit for GM.

Another factor that was hitting GM at the time of Vauxhall's sale was increasing regulations on cars in Europe. As well as the need to focus on already profitable markets, such as North America and China. Also, GM is not well suited to the European market in the first place. And by selling Vauxhall to PSA, GM is allowing Vauxhall to succeed by giving it to a company that understands the European market, and what the consumer in Europe wants.

A 2017 Vauxhall Vivaro (credit: mondialcars.co.uk)

A 2017 Vauxhall Vivaro (credit: mondialcars.co.uk)

So after looking up the numbers, it seems like it makes perfect sense why GM would have sold Vauxhall off. Although I wish that GM would just make high-quality cars to fit the individual markets where they sell cars. But after taking over Vauxhall, has PSA improved it. Seemingly so, under PSA, Vauxhall turned a 502 million pound profit in the first quarter. Vauxhall seems to be doing well under PSA, now merged with Fiat-Chrysler, known as Stellantis.

Vauxhall is a good company, and as PSA has proven, it can be profitable under the right leadership. And it is doing well, with no sign of stopping anytime soon. And I am happy that Vauxhall is continuing, as I find foreign car companies that we don't get in the U.S. to be fascinating.

Join In

Comments (7)

  • They basically sold Opel, as Vauhxall is just a label to appeal to UK market more. Without Opel cars, the brand itself means zero outside the island - it's been like 50 years since Vauxhall had a substance that isn't made in Ruesselsheim.

      1 month ago
    • And now they're rebadged Poogeots. No thanks, I'd rather have a flesh eating infection.

      Out of the frying pan, into the sewer.

        1 month ago
  • The Global Financial Crisis. GM went bust. The US government bailed it out, and it sold the loss-making parts of the business that it could (Opel) and shuttered those that it couldn't (Holden). Ford survived by selling off all but one of the brands that had formerly constituted its Premier Automotive Group.

      1 month ago
  • It's this old fat guy's fault, calling it pensioners company. (and I am an American so I know what fat guy's look like) 😉

      1 month ago
  • What! no more VX220?

      1 month ago
7