Peugeot owner sees profits double, sparking further talks with General Motors

Carmaker PSA Group saw profits almost double in the last year, showing strong trading ahead of a possible deal to purchase General Motors’ European business.

Net income at PSA Group rose 92 percent over the last year to 1.73 billion euros, with recurring operating income rising to 3.24 billion euros. This includes a loss of 280 million euros from currency swings in the wake of Brexit.The company also announced plans for a 48 euro cents dividend per share.

The strong results will increase the intensity of discussions between PSA, who own Peugeot and Citroen, and General Motors. The chairman of PSA Group has spoken of his desire to create “European car champion” through a purchase of General Motors’ European car business, who own Opel and Vauxhall.

PSA’s chairman Carlos Tavares said the deal would be “nice to have” but that it “wasn’t a must”, before adding:

“We believe there is an opportunity to create a European car champion, resulting from the combination of a French company and German company and without forgetting our U.K. friends.

“Opel has making red ink for 10 years, and burning approximately 1 billion in cash every year. We believe we can help.”

Detroit-based General Motors have been struggling with a lack of demand for several years, last making a profit in Europe in 1990.

However, the potential deal has been met with criticism by several European counties, who are worried about a loss of jobs as a result of the potential merger.

Opel employee representatives and union leaders in Germany are pushing for a safeguarding of their jobs, and Britain’s biggest trade union has demanded that the government protect Vauxhall as Britain prepares to leave the EU.

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Miranda is the online editor of UK Investor Magazine. Her interests include private equity, crowdfunding, peer-to-peer lending, gender equality and coffee.