General Motors's European operations could be merged with PSA Peugeot-Citroen, French media reports have claimed.
Under the proposals, Vauxhall-Opel and PSA Peugeot-Citroen would be merged, and General Motors would inject a significant amount of money into the company to bankroll future product development.
Neither General Motors nor PSA has commented on the rumours.
The news comes following a difficult couple of years for General Motors. In 2009, the company was bailed out by the US government, and although its stateside operations are once more turning a profit, its European division is feeling the effects of the financial crisis and haemorrhaging money to the tune of £1bn a year.
The news is even worse at PSA. The company is losing almost £2bn annually, a problem exacerbated by under-utilised production plants and the need to heavily discount showroom prices.
The merger would help drive down production and development costs for both companies by allowing them to share platforms and technology; however, it would also almost certainly lead to the closure of one or more factories. This is a worry for Vauxhall's Ellesmere Port plant, which has recently been contracted to produce the upcoming 2015 Astra.
If the merger does go ahead, it is speculated that the company's model line-up could include a replacement for the Insignia and 408/C5, a range of small crossovers and a budget brand to rival Dacia.
The proposed union is still unconfirmed; however, if the plans do come to fruition, expect to see new Vauxhall-Opel-Peugeot-Citroen models on your local dealer forecourt as early as 2016.
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