PSA boss says Opel deal would find 'speedy' savings

PARIS PSA Group’s (PEUP.PA) proposed acquisition of Opel would swiftly create savings and value from the General Motors (GM.N) European division’s turnaround and complementary brands, the French carmaker’s Chief Executive Carlos Tavares said on Thursday.

Adding GM’s German Opel British Vauxhall brand would bring new customers reluctant to buy French cars, Tavares told analysts and reporters, while generating savings from shared technical underpinnings.

“There is significant complementarity in terms of customer consideration between the German Opel brand and our three French brands,” Tavares said, referring to the French group’s Peugeot, Citroen and DS badges.

“This company needs help,” he said. “What we see today with the situation of Opel … has a lot of similarities with what we were facing four years ago.”

Under Tavares, PSA has rebounded from a 2014 brush with bankruptcy and state-backed bailout to record levels of profitability. On Thursday, it posted a 6 percent automotive operating margin for 2016 and raised its medium-term earnings goal.

Savings with Opel, if the deal goes through, would be underpinned by rapid convergence of underlying vehicle architectures, the PSA chief also said.

“When you look at the product plan you see that you can in a quite speedy way implement quite significant synergies,” Tavares said.

PSA expects the deal to lead to combined sales of 5 million vehicles in 2020-22 and savings between 1.5 billion and 2 billion euros ($1.6 billion to $2.11 billion), sources told Reuters on Wednesday.

(Reporting by Laurence Frost. Editing by Jane Merriman)