29/11/2017

PSA seeks GM refund of €0.5bn

Reuters reports that Peugeot maker PSA Group, is requesting a refund of around €0.5bn after discovering the extent of the CO2 emissions challenges.

PSA acquired the Opel brand from GM for €1.3bn in July, and according to Reuters' source is seeking €600-800m on the grounds that it was misled about Opel's emissions strategy.

PSA said it will need to move the Opel models onto its own more fuel-efficient technology faster than planned, in order to cut carbon dioxide emissions before new EU limits are phased in from 2020-21.

Chief executive Carlos Tavares said, 'We became aware a few weeks after we finalised the closing that the company was going to the wall on CO2 emissions,' the PSA boss told reporters on 9 November, after presenting a heavily revised turnaround plan at Opel headquarters near Frankfurt. PSA shares have since fallen 10.6%, underperforming peers.

'We put our teams to work to completely rebuild the product and technology strategies,' Carlos said. 'If you fail to comply (with EU rules) the weight of fines you are hit with can threaten the company's existence.'

'We've been reporting for years that Opel/Vauxhall would have significant problems meeting the CO2 targets as GM brands in Europe,' said Thomas Goettle, the firm's head of automotive.

'Opel is five to seven years behind with their engine lineup,' Thomas said. 'We haven't seen any big GM investments in Opel to develop plug-in hybrids or zero-emissions cars.'

A formal claim is has not been raised yet.