Opel Q2 loss widened to $250 million, sources say

BERLIN -- Opel, which General Motors has sold to PSA Group, widened its losses in the second quarter to around $250 million, Automobilwoche reported.

Opel is losing around 4 million euros ($4.74 million) every working day, Automobilwoche, a sister publication of Automotive News Europe, reported Saturday, citing two unnamed sources close to Opel and PSA.

Opel made a loss of $210 million in the first quarter.

Opel declined to comment on the report.

GM is selling off its money-losing European operations to PSA, the owner of the Peugeot, DS and Citroen brands. PSA has a better track record of profitability in the business of manufacturing small cars in Europe.

PSA CEO Carlos Tavares said in May he expects Opel to lose more money in 2017.

Opel was loss-making for the past 16 years in part because the carmaker was forced to spend roughly $1 billion a year on research and development to help keep small and compact vehicles compliant with new European anti-pollution rules. These differ substantially from those in the U.S. or China. Tavares has said that PSA would move swiftly to introduce its platforms to Opel vehicles, a step that would increase economies of scale and efficiencies for both companies.

Automobilwoche cited one PSA manager as saying that integration teams of high ranking representatives from PSA, Opel and GM met in Paris in the last week to discuss future strategy.

PSA agreed that Opel will set its own direction in many areas, although many Opel engines are likely to be replaced with PSA powerplants because they will not meet future stricter emissions rules. Worker representatives fear that only 800 out of Opel's 7,700 employees in development will still be needed.

PSA wants Opel to return to lasting profit no later than by 2020 with operating margin goals of 2 percent that year and even around 6 percent by 2026.

PSA said on Aug. 1 that it had completed its takeover of the Opel and its UK sister brand Vauxhall The acquisition makes PSA Europe's second-largest automaker by vehicle sales after Volkswagen Group.

GM said on July 25 it lost $770 million in the second quarter from discontinued operations, which included the sale of Opel to PSA.

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