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Opel benefits from French savoir-faire

After some huge losses Opel’s fortunes have been turned around since the German GM brand was acquired by Groupe PSA (Peugeot/Citroen) just 11 months ago.

Opel last made a dollar back in 1999 and has since been running at a shocking loss, with GM reportedly losing some $20 billion until PSA bought Adam Opel’s sinking outfit late last year for $3.5 billion.  

Opel’s car making history dates back to 1899.

Under French guidance, it sold 551,000 vehicles and made a profit of nearly $800 million in the first half of this year.

The massive turnaround was the result of the cost-cutting strategies of PSA Group CEO Carlos Tavares, including manufacturing and logistics efficiency gains and access and sharing of platforms and other technologies Citroën, DS and Peugeot.

The next step will be to fully swap Opel to PSA Group platforms and expand Opel into markets beyond Europe, with the aim of getting it into 20 new export markets by 2022.

To do so, it will build an assembly plant in Namibia in a move that some might see as a coal to Newcastle move, since Namibia was formerly known as German South-West Africa.

The diamond-rich territory was a German colony from 1884, but lost it to South African troops in WWI.

It was run by the UN from 1966 until it was renamed and became independent in 1990.

It has a population of about 2.8 million and is primarily a mining and farming nation.

PSA has signed a joint venture agreement with the Namibia Development Corporation, with the aim is to assemble 5000 vehicles a year from semi-knocked-down (SKD) kits in 2020.

The Opel Grandland X and Peugeot 3008 — which share a platform — will be the first  off the assembly line, while other products could follow suit depending on demand levels.

The plant will be at Walvis Bay and the Namibian-assembled vehicles will be sold mainly in the Southern African Customs Union countries, which includes South Africa, Botswana, Lesotho, Namibia and Swaziland.

Opel has long been part of the southern African car world and was for many years built at GM’s Port Elizabeth plant.

PSA also plans to electrify the entire Opel lineup in Europe by 2024 and make Opel’s  Rüsselsheim R&D centre the global tech headquarters for the entire PSA Group.

PSA executive Jean-Christophe said the investment in Namibia was part of a long term strategy to increase its sales in Africa and the Middle East, with our target of selling a million vehicles in 2025.

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