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Tag: car

  • India’s Motherson Sumi buys Finland’s PKC Group for $619 million

    India’s Motherson Sumi buys Finland’s PKC Group for $619 million

    Indian auto parts maker Motherson Sumi Systems Ltd said on Monday it had completed the buyout of Finland’s PKC Group for 571 million euros ($619.4 million).

    Motherson is now the controlling shareholder of PKC Group, holding 93.75 percent of PKC’s outstanding shares and stock options.

    “There is a great synergy between MSSL & PKC and a complementary geographical presence to serve the customers in all regions,” Motherson said in a statement.

    Shares of Motherson, which have gained 12 percent since the deal was made public on Jan. 20, were trading slightly higher on Monday.

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  • Hyundai Suspends Production at a China Factory for a Week Amid Political Spat

    Hyundai Suspends Production at a China Factory for a Week Amid Political Spat

    South Korea’s Hyundai Motor on Monday said it had suspended production at one of its Chinese factories for a week, fueling concern that a diplomatic standoff may be hurting sales in the automaker’s top market.

    South Korean companies, from cosmetics firms to retailers, say they are being targeted in China because of Beijing’s objections to a planned deployment of the U.S. Terminal High Altitude Area Defence (THAAD) system in South Korea. China worries the system’s powerful radar can penetrate its territory.

    News of Hyundai’s China plant closure, first reported by online media ChosunBiz on Sunday, drove shares of the company down as much as 3% on Monday. The shares recovered slightly to end down 1.2%.

    Shares in Hyundai’s affiliates, Kia Motors and Hyundai Mobis, also finished lower.

    Hyundai said it had suspended the plant in Hebei Province, from March 24 to April 1, in order to check its production line to modify technology. The automaker has three other passenger car factories in China – a country that accounts for about a quarter of its total sales. No further details were available.

    Industry officials and analysts say the suspension may be aimed at bringing down inventories given slowing sales in China, due to political tension and rising competition.

    Ko Tae-bong, an analyst at Hi Investment & Securities, said Hyundai’s March sales in China may have fallen year-on-year due to the political spat, after gaining in January and February.

    China Competition

    The automaker is already grappling with falling market share in China with a product line-up that features more sedans at a time when sport utility vehicles have become more popular.

    China’s Geely Automobile Holdings recently reported its biggest profit growth in eight years, underlining a threat from Chinese makers armed with cheaper SUVs.

    Hyundai makes Verna subcompact cars at its Hebei plant, which came online less than six months ago.

    The automaker plans to start production at a fifth China factory later this year. Hyundai’s China operations are a 50-50 joint venture with state-owned Beijing Automotive.

    Hyundai officials have previously said the company’s business ties with Chinese firms meant they were less likely to be the main target of any punishment resulting from the diplomatic standoff over the deployment of the THAAD.

    The chill in business ties between the nations is evident from the fact that China’s tourism ministry has instructed tour operators in Beijing to stop selling trips to South Korea, while state media has called for a boycott of South Korean goods.

    Chinese authorities have also closed nearly two dozen retail stores of South Korea’s Lotte Group, with some workers saying the closures were fire-safety related. Earlier this year, Lotte approved a land swap outside Seoul that will allow South Korea to install the THAAD.

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  • China’s Geely doubles earnings as Volvo tech boosts sales

    China’s Geely doubles earnings as Volvo tech boosts sales

    China’s Geely Automobile Holdings posted its biggest profit growth in eight years on Wednesday, as improved product design and engineering following its 2010 purchase of Sweden’s Volvo helped propel it to record sales.

    Geely, which also owns the maker of London’s black cabs, has already forecast a 31 percent jump in sales for the current year as affordable models introduced after the Volvo acquisition, such as its GC9 sedan and Boyue sport-utility vehicle, exceed initial estimates.

    Long seen as a no-frills brand, Geely has transformed itself into an automaker with up-market aspirations, using its Volvo research-and-development advantage to climb the sales table in the world’s largest auto market where it ranks around seventh.

    Come next year, Geely plans its next phase of expansion as it aims to become China’s first automaker to market its own brand – new Volvo collaboration Lynk & Co – in developed markets, beginning with Europe and the United States.

    Entering major markets with an unknown Chinese brand is an expensive risk, analysts say, but investors are unperturbed: Geely’s share price has trebled over the past 12 months.

    “It’s a total turnaround story,” said a fund manager at a Taiwan-based investment firm that bought a significant amount of Geely stock last year.

    “Before it was just a normal domestic brand, but after several new product launches it successfully elevated its brand image,” said the person who was not authorized to speak publicly on the firm’s investments and so declined to be identified.

    Geely’s China sales grew 50 percent last year to 766,000 vehicles, powered by the GC9 and Boyue, as well as small cars featuring Volvo technology. It aims to top 1 million this year, though could sell far more depending on market conditions, a Geely official with direct knowledge of the matter told Reuters.

    For 2016, net profit more than doubled to 5.1 billion yuan ($741 million), its strongest growth since 2008. The figure is set to rise 37 percent to 7 billion yuan in 2017, showed a Reuters poll of analyst estimates prior to Geely’s Wednesday filing.

    Geely shares were down 1.2 percent in early afternoon trading after the earnings release.

    OVERSEAS GAMBLE

    To be sure, growth has come at a cost. Geely and parent Zhejiang Geely Holding Group have spent 10 billion yuan on R&D in each of the past three to four years, or about 15 percent of current revenue, said spokesman Victor Yang.

    That compared with 2 billion yuan in 2015 at domestic rival BYD.

    But Geely’s domestic growth spurts could lessen as expansion in China’s overall passenger car market slows following the reduction of subsidies for small-engine vehicles, adding impetus to any international push.

    “The current focus of our work is firstly the pace of development in China and increasing our share of the Chinese auto market, then next we can focus our work abroad,” Geely Chairman Li Shufu told reporters in Beijing earlier this month.

    But entering markets where the brand is unknown is a gamble, and it could take years to gain traction, said James Chao, Asia-Pacific chief of consultancy IHS Markit Automotive.

    As there is plenty of room for growth in China, however, there is no need to be concerned about the move abroad, said fund managers at two investment firms that hold Geely stock.

    “If they do well abroad it’s a bonus, and if they don’t then it’s not a big reason to worry,” one of the managers said.

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  • VW trucks division targets strong profitability gain in 2017

    VW trucks division targets strong profitability gain in 2017

    Volkswagen’s truck division aims to significantly increase its profitability this year as deepening cooperation between the MAN and Scania brands and improving overseas markets spur business, it said on Monday.

    Volkswagen, which launched a new truck & bus division in 2015 to challenge global rivals Daimler and Volvo, is targeting a long-term operating margin target of 9 percent, up from 6.1 percent last year.

    “We are not striving to become a volume champion, we want to be the most profitable ones,” chief executive Andreas Renschler told journalists, referring to improving markets in Western Europe, Russia and China.

    But finance chief Matthias Gruendler made clear a significant improvement in financial results requires a rebound in the key Brazilian market where the VW division commands a 37-percent share of the country’s commercial-vehicles market.

    Overall truck and bus sales in Brazil have been falling for four years but demand is expected to rebound slightly in the second half of the year amid the improving economy with a chance for stronger growth in 2018, Gruendler said.

    “Brazil has always been an important market and is characterized by a high degree of cyclicality,” chief executive Andreas Renschler said.

    Under Renschler, who ran Daimler Trucks before joining VW in February 2015, Europe’s largest automotive group has also been seeking to expand its footprint in international truck markets.

    Last year, VW announced a stake purchase in U.S. truck maker Navistar International which may earn the German group access to the vast North American truck market, and is also in talks about finding a new partner in China.

    “We are currently in discussions about different opportunities,” Renschler said. “All options are open” including a possible increase in MAN’s stake in China’s Sinotruk and finding a new partner.

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  • Liaoning SG Auto cancels new energy car components JV with South Korea’s Samsung SDI

    Liaoning SG Auto cancels new energy car components JV with South Korea’s Samsung SDI

    Liaoning SG Automotive Group Co Ltd Says it will not set up new energy car components JV with partners including South Korea’s Samsung SDI.

    Says it will dissolve a Tianjin-based financial leasing JV, which was set up in 2014.

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  • Toyota aims to boost Brazil exports with locally made engines

    Toyota aims to boost Brazil exports with locally made engines

    Toyota Motor will soon begin selling Brazilian-made Corollas in Peru, executives said on Thursday, and is in advanced studies to export from Brazil to Chile and Colombia in a push to make its South American plants more competitive.

    Steve St. Angelo, Toyota’s most senior executive in the region, said the exports to Peru were part of a long-term plan to integrate Brazilian operations with the rest of Latin America, which has long imported Corollas from the United States.

    Toyota’s Brazilian factories, which exported only to Argentina when St. Angelo arrived in 2013, also send the mid-sized Corolla sedan and smaller Etios to Uruguay and Paraguay now.

    Toyota has invested in a new engine plant and engineering facilities in Brazil, which St. Angelo said would be key to lifting the domestic content of the Corolla and Etios from about 60 percent currently. As Brazilian plants import fewer parts, they should be able to export more competitively to new markets, he said.

    Rafael Chang, the company’s new chief executive in Brazil, said he hoped to have news “soon” on exports to Chile and Colombia.

    Toyota’s exports from Brazil rose nearly 10 percent in 2016 to about 43,000 cars, of some 176,000 vehicles produced in the country last year.

    “We’re trying to diversify our Brazilian operations, so we’re not so dependent on this one economy,” St. Angelo told journalists at a launch event for the new Corolla in Brazil.

    Brazil’s worst recession in more than a century has nearly halved auto sales since 2012, battering automakers’ profitability and leading them to cut some 35,000 workers.

    Auto factories in Brazil are still using less than half of installed capacity, as high unemployment and tight credit pinch demand. St. Angelo acknowledged that Toyota had struggled to turn a profit in the country during the recession.

    “We’re not going to break even this year,” he said of the Brazilian business, adding that Toyota had not finalized its projections for the fiscal year. “We’ve been doing an unbelievable amount of cost cutting. Everyone is sacrificing.”

    St. Angelo said an overhaul of Argentine operations had also diversified exports from that country beyond just Brazil to include Honduras, Guatemala, Peru, Chile and Colombia.

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  • Car industry players diverge on timescale for self-driving cars

    Car industry players diverge on timescale for self-driving cars

    Carmakers and suppliers gave widely differing timelines for the introduction of self-driving vehicles on Thursday, showing the uncertainties surrounding the technology as well as a split between cautious established players and bullish new entrants.

    Chipmaker Nvidia, facing direct competition with the world’s top chipmaker after Intel’s (INTC.O) $15 billion deal to buy autonomous driving technology firm Mobileye this week, gave the most optimistic predictions.

    Chief Executive Jen-Hsun Huang forecast carmakers may speed up their plans in the light of technological advances and that fully self-driving cars could be on the road by 2025.

    “Because of deep learning, because of AI (artificial intelligence) computing, we’ve really supercharged our roadmap to autonomous vehicles,” he said in a keynote speech to the Bosch Connected World conference in Berlin.

    Germany’s Bosch, however, the world’s biggest automotive supplier, gave a timetable as much as six years longer to get to the final stage before fully autonomous vehicles, and declined even to forecast when a totally self-driving car might take to the streets.

    Progress is fraught by issues including who is liable when a self-driving car has an accident, bringing down the costs of sensor technology and guarding against hacking.

    “Of course, we still have to prove that an autonomous car does better in driving and has less accidents than a human being,” Bosch CEO Volkmar Denner told a news conference.

    Nvidia has applied its market-leading expertise in high-end computer graphics to the intense visualization and simulation needs of autonomous cars, and has been working on artificial intelligence – teaching computers to learn to write their own software code – for a decade.

    “No human could write enough code to capture the vast diversity and complexity that we do so easily, called driving,” said Huang.

    Together with Bosch executives, Huang presented a prototype AI on-board computer that is expected to go into production by the beginning of the next decade. The computer will use Nvidia’s processing power to interpret data gathered by Bosch sensors.

    DEGREES OF AUTONOMY

    On the way to fully self-driving cars, levels of autonomy have been defined, with most cars on the road today at level two and Tesla (TSLA.O) ready to switch from level four to five – full autonomy – as soon as it is permitted to do so.

    Level three means drivers can turn away in well-understood environments such as motorway driving but must be ready to take back control, while level four means the automated system can control the vehicle in most environments.

    Independent technology analyst Richard Windsor wrote in a note this week he doubted automakers would have autonomous vehicles leaving factories by a typical self-imposed deadline of 2020, mainly because the liability issue was unresolved.

    “This is good news for the automotive industry which is notoriously slow to adapt to and implement new technology as it will have more time to defend its position against the new entrants,” he wrote.

    But Nvidia’s Huang said he expected to have chips available for level three automated driving by the end of this year and in customers’ cars on the road by the end of 2018, with level four chips following the same pattern a year later.

    That is at least a year ahead of the plans of most carmakers that have an autonomous-driving strategy.

    The head of autonomous driving at BMW told the conference the luxury carmaker was on its way to deliver a level three autonomous car in 2021, but could produce level four or five autonomous cars in the same year.

    “We believe we have the chance to make level three, level four and level five doable,” he said. He told Reuters the decision on which levels to release would depend in part on the market, and that cars with more autonomy might first be produced in small batches for single fleets.

    Bosch said it saw level three vehicles being released with its on-board computer at the end of the decade, and level four driving not before 2025.

    Uber , Baidu and Google spin-off Waymo are testing self-driving taxis, while carmakers including Volvo, Audi and Ford expect to have level four cars on the road by 2020 or 2021.

    Nvidia’s Huang predicted those plans would speed up: “In the near future, you’re going to see these schedules pull in.”

  • Renault denies report of emissions cheating software

    Renault denies report of emissions cheating software

    Renault is denying a report that its vehicles are equipped with software that allowed its vehicles to cheat on emissions testing.

    The statement Wednesday from the French carmaker followed a report in the newspaper Liberation, which claimed to have obtained an investigative document from the Economy Ministry indicating that emissions from two models – the Renault Captur and the Clio IV – spewed emissions more than 300 percent higher than the legal limit in real-life conditions.
    The ministry’s fraud department handed its findings to prosecutors in November.

    French authorities raided Renault premises after Volkswagen was found to have used software to cheat on U.S. diesel emissions tests. Renault recalled 15,000 cars last year over excessive levels of harmful gases, but the company insisted there was no intentional wrongdoing.

  • VW’s MAN sees significant rise in 2017 operating profit

    VW’s MAN sees significant rise in 2017 operating profit

    Volkswagen division MAN expects operating profit to rise significantly in the fiscal year 2017, as the company continues its diesel-engine unit restructuring, which started in September.

    The German truck maker said on Thursday its operating profit rose to 204 million euros ($219 million) in 2016, up from 92 million in the previous year.

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  • Mercedes-Benz plant starts production of the new GLA

    Mercedes-Benz plant starts production of the new GLA

    German car manufacturer Mercedes-Benz has commenced the production of its compact SUV Mercedes-Benz GLA at its Rastatt plant in Germany.

    “The ramp-up of the GLA is further proof of the diversity, competitiveness and efficiency of our production operations at the Rastatt plant. Within a very short space of time, our team mastered another ramp-up in ongoing series-production, while the location operates at full capacity and the preparations for the next generation of compact cars are running at full steam”, says Thomas Geier, Location Manager Mercedes-Benz Rastatt plant.

    The new GLA enters its current model year with an expanded range of engines and a visual upgrade of the interior and exterior design as well as updated equipment variants. Mercedes-Benz GLA made its global debut in 2013 and has been an important product in the company’s product portfolio.

    Mercedes-Benz Rastatt plant in Germany is the biggest employer in the region, with a workforce of around 6.500 employees. Within the global Mercedes-Benz production network, the Rastatt plant is the lead plant for the production of compact cars worldwide. The A-Class, B-Class and B-Class Electric Drive, as well as the compact SUV GLA are manufactured at the location.

    In 2016, more than 300,000 vehicles rolled off its production lines.

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  • Gemalto to power China’s first internet car

    Gemalto to power China’s first internet car

    Gemalto is working with Banma Technologies, a new joint venture between Alibaba Group and SAIC Motor, to help produce China’s first internet car the Roewe RX5.

    The RX5 leverages Gemalto’s machine identification module (MIM) — securing cellular M2M connections for industrial applications — and features advanced telematics such as Bluetooth virtual car key, locationing of the vehicle, voice-command-enabled remote control of in-car functions, and real-time road condition alerts, etc.

    The MIM is compliant with the GSMA standards and supports remote provisioning of any operator’s profile.

    “The Roewe RX5, empowered by Alibaba’s YunOS operating system, is the first mass produced internet car. It’s a breakthrough embodying years of research and technological innovation,” said Alex Shi, CEO of Banma. “It is a product that demands the most secure and reliable end-to-end connectivity.”

    Suzanne Tong-Li, president of Greater China and Korea at Gemalto, said connected cars mark the beginning of digital transformation across the automotive industry, paving the way for autonomous vehicles in the near future.

    “Our expertise and global experience, combined with tried-and-tested secure connectivity solutions, put us in a sweet spot to help car manufacturers create smarter and more connected vehicles,” said Tong-Li.

    The Chinese car market is currently the largest and fastest-growing in the world. In 2015, foreign and domestic car makers sold a total of 21.1 million passenger cars, up by 7.3% compared to 2014.

    For 2016, the local connected car market is expected to generate a substantial revenue of $7.7 million.

    With an estimated compound annual growth rate of 45%, this market is potentially worth up to $33.9 million by 2020. Moreover, connected car penetration in China is projected to triple from 4.8% to 18.1% over the same period.

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  • Sale of cars down despite price drop

    Sale of cars down despite price drop

    Members of the Vietnam Automobile Manufacturers’ Association (VAMA) sold more than 17,600 cars in February, down 13 per cent from the previous month.

    The prices of many types of cars were adjusted in the market in recent months. This is the second month this year that the association has witnessed a drop in sales, although its members continuously reduced prices of their products.

    At the end of last month, prices of seven types of cars were adjusted, including imported and locally-assembled ones.

    Honda Vietnam decreased its price by VND80 million for Accord, which was imported from Thailand. Meanwhile, Toyota Motor Vietnam (TMV) announced new prices for Yaris models G and E, with a drop of VND47 million (US$2,057) and VND44 million, respectively. The imported Land Cruiser Prado TX-L and Land Cruiser VX also saw a revision in prices at nearly VND2.17 billion and VND3.65 billion, down VND264 million and VND70 million each.

    Honda Vietnam and TMV were followed by other automakers.

    Domestic automaker Thaco reduced the prices of Kia and Mazda models by between VND20 million and VND140 million each.

    A report from the People’s Committee in central Quang Nam Province showed that vehicles witnessed the highest inventory volume in the province, which was nearly 49 per cent higher than the previous month and almost triple compared with the same period last year.

    This was partly due to the increase in demand for vehicles before the Tet (Lunar New Year) holiday, which declined after the holiday. In addition, people were still waiting for prices to reduce further, especially once the import tax on vehicles from ASEAN countries dropped to zero per cent by January 1, 2018, according to the committee.

    While the consumption of locally-assembled cars was showing a declining trend, the volume of imported cars had sharply increased.

    According to the estimate of the General Statistics Office (GSO), Viet Nam imported some 9,000 complete built up units in February, worth $153 million, up 29 per cent in volume in comparison with the previous month but sticking to the same value.

    On average, each imported car in February was $17,000 — $4,850 lower than January – which meant almost all imported cars were less expensive.

    During the Government’s February meeting session, Prime Minister Nguyen Xuan Phuc reminded relevant ministries about the rapid increase of imported vehicles in the first two months of this year, which was due to the impact of the expected import tax decline in 2018.

    He said this was a warning to relevant ministries and sectors to strengthen management to create harmony between import and local auto manufacturing.

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  • Toyota sees Europe sales up 5 pct this year as hybrids push pays off

    Toyota sees Europe sales up 5 pct this year as hybrids push pays off

    Toyota Motor expects to increase its European sales by 5 percent this year to 975,000 vehicles and maintain its market share of around 5 percent, buoyed by the popularity of hybrids, its regional head said on Monday.

    Speaking ahead of the Geneva auto show, Johan van Zyl said sales of hybrid vehicles in Europe rose 40 percent last year and made up 32 percent of all sales in the region. For Toyota, Europe counts 56 countries, including Israel, Russia and Turkey.

    “We are on our way of achieving our target of having 50 percent of our mix in hybrids by 2020,” he told journalists.

    The executive said the outlook for Europe was clouded by upcoming elections, Britain’s pending exit from the European Union and persistent difficulties in the Russian and Turkish markets.

    He expects industry-wide sales in Europe to rise 1 percent this year. He said any increase in the western part of the region would likely be absorbed by some weakness in Britain, and expects some recovery in Russia.

    Van Zyl said PSA’s announcement on Monday that it would buy Opel from General Motors Co, creating Europe’s second biggest carmaker after Volkswagen AG, would not affect its own strategy.

    “We have no intention at the moment to alter any of our plans with regards to how we’re going to compete in the industry, we’ve got a very clear strategy,” he said, adding that Toyota would keep focusing on the A, B and C segments, keeping hybrids as its differentiator.

    “We are not a volume chaser, we want to create a sustainable, growing business in Europe,” he added.

    Van Zyl said Toyota was fully committed to its operations in the UK regardless of how the negotiations around Brexit pan out, but added that the carmaker was seeking to make the business more efficient.

    “The prudent approach is always to prepare yourself for the worst-case scenario. If we prepare for that and it’s better, then we are OK,” he said.

    He declined to comment on future production plans there other than saying Toyota “will produce vehicles in the UK”.

    Didier Leroy, Toyota’s executive vice president, added that a next-generation fuel cell car the group is developing with BMW will be ready in three to five years, while a separate project to develop a sports car with the German carmaker was ongoing.

    “The project has been globally approved, that means clearly that we will do it,” he said, but declined to give a timeline for when it would be produced.

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  • Volkswagen to unveil self-driving car as part of post-dieselgate shift

    Volkswagen to unveil self-driving car as part of post-dieselgate shift

    Volkswagen will show off a fully self-driving car at the Geneva auto show, as part of the German carmaker’s drive to be at the forefront of new technologies in the wake of its diesel emissions scandal.

    Europe’s biggest carmaker has said it will invest billions of euros in electric cars, ride-hailing and automated driving, and launch over 30 electric models by 2025 as it battles to recover from its emissions test cheating.

    The self-driving concept car called Sedric – a so-called Level 5 vehicle capable of fully automated operation – is a precursor for more such models from the Volkswagen (VW) group in years to come, Chief Executive Matthias Mueller said on Monday on the eve of car executives’ annual gathering in Geneva.

    VW is hiring top specialists and plans to spend several billions of euros on automated driving alone, Mueller said, without being more specific.

    Sedric can carry 4 passengers and could be used for ride-sharing fleets as well as for individual consumers, VW said.

    Internet giant Google was a forerunner in self-driving technology with its 2015 prototype vehicle, but has since been challenged by companies ranging from Uber to Apple, as well as traditional carmakers.

    Manufacturers and their suppliers are working on different technology suites – including cameras, radar and laser imaging technology lidar – to enable vehicles to drive themselves, but it will take years for these vehicles to come to market.

    Mercedes-Benz unveiled its fully autonomous F 015 luxury concept two years ago. But Toyota has said it does not expect to see Level 5 cars in widespread use for another 10-15 years, while Ford does not plan to offer such vehicles for consumers until 2025 or later.

  • Peugeot poised to buy GM’s Opel, creating a car giant

    Peugeot poised to buy GM’s Opel, creating a car giant

    France’s PSA Group is set to announce a deal to buy Opel from General Motors (GM.N) on Monday after striking an agreement with the U.S. carmaker and winning the blessing of its board for the acquisition.

    The maker of Peugeot, Citroen and DS cars said on Saturday it would hold an early Monday press conference with GM, at which the transaction is expected to be presented after Reuters reported that a deal had been struck between the two automakers.

    By acquiring Opel, the French group will leapfrog rival Renault (RENA.PA) to become Europe’s second-ranked carmaker after Volkswagen (VOWG_p.DE) by market share. Between them, PSA and GM Europe recorded 71.6 billion euros ($76 billion) in revenue and 4.3 million vehicle deliveries last year.

    The tie-up was approved on Friday by the PSA supervisory board, on which the French government, Peugeot family and China’s Dongfeng (0489.HK) are represented as shareholders, one source with knowledge of the matter said.

    Spokespeople for PSA and Opel declined further comment.

    The two carmakers, which already share some production in an existing European alliance, confirmed last month they were negotiating an outright acquisition of Opel and its British Vauxhall brand by Paris-based PSA, sparking widespread concern over possible job cuts.

    In their jointly issued invitation to a Paris press conference at 0815 GMT on Monday, PSA and GM gave no indication of its subject. Separate briefings for the German press and Opel unions are expected to be held the same day.

    Sources close to the talks had reported progress on Thursday after the carmakers narrowed differences on a near-$10 billion Opel pension deficit and other issues. GM’s European arm recently posted a 16th consecutive year of losses.

    The negotiations had encountered problems over GM demands that a PSA-owned Opel be barred from competing against its own Chevrolet lineup in markets including China, they said.

    But the “non-compete” issues were finally resolved as GM agreed to inject “substantially more” into the pensions than the $1 billion to $2 billion it had initially offered, another person said. The sources declined to give further details. Detroit-based GM, which came close to selling Opel to Magna (MG.TO) in 2009, has faced investor pressure to offload its struggling European arm and focus on raising profitability rather than chase the global sales crown currently held by VW.

    After fending off 2015 merger overtures by Fiat Chrysler with support from her board, GM Chief Executive Mary Barra agreed to target a 20 percent minimum return on invested capital and pay out more cash to shareholders.

    For PSA, the Opel deal caps a stellar two-year recovery under cost-cutting CEO Carlos Tavares, who said on Feb. 23 he would apply the same methods to Opel if the deal went through. PSA averted bankruptcy by selling 14 percent stakes to France and Dongfeng in 2014, to match a diluted Peugeot family holding.

    The acquisition offered an “opportunity to create a European car champion” and quickly exceed 5 million annual vehicle sales, Tavares told analysts as he presented full-year earnings. PSA also expects savings of up to 2 billion euros ($2.1 billion) from the tie-up, sources have said.

    Tavares also told his board that PSA would redevelop the Opel lineup with its own technologies to achieve rapid savings, according to people with knowledge of the matter.

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