General Motors has reportedly agreed to sell off its Opel European division to French auto giant PSA Group.
Should the multi-billion dollar deal go through, it has the potential to change the landscape of the European auto market.
However, PSA’s crosstown rivals at Renault don’t seem to be overly concerned.
In an interview with Business Insider, Renault chairman and CEO Carlos Ghosn explained that he’s not remotely concerned by the deal and the increased competition it may create. Ghosn also serves as chairman and CEO of Nissan and chairman of Mitsubishi, though he’s giving up the Nissan CEO role in a month.
“Are they a particular threat to us? I don’t think so,” Ghosn said.
“I think the only threat we have as a 10 million-car group that’s well-positioned on practically all continents, is that we misunderstand market trends or that we misunderstand the effect of a specific technology.”
Rumors of a potential deal between GM’s loss-making German subsidiary and the maker of Peugeot and Citroen automobiles heated up in February. The total value of the reported deal remains unclear, although early estimates had the deal pegged at more than $2 billion. According to Reuters, PSA also has to take into account Opel’s $10 billion worth of pension obligations.
Details of the deal aside, Ghosn actually believes consolidation among car companies make a fair amount of sense if done well.
“We know that consolidation in our industry is going to continue and that smaller players are going to try to grow because they know that, if appropriately managed, scale is a determinant factor in competition,” Ghosn told us. “So you are going to have a lot of people trying to grow one way or another to reach what they consider to be a critical mass that allows them to compete.”
For Ghosn, who also serves as Chairman of Nissan and Mitsubishi, as long as his teams keep their fingers on the pulse of the market and correctly anticipate the needs of their consumers, they’ll be fine.
“We watch competition, obviously, but I don’t believe the threat comes from competition. The threat comes always from the fact that you are not anticipating the market needs or that you do not have enough competitive offerings,” he added.
- AP Photo/Shuji Kajiyama, File
As a result, Renault, Nissan, and Mitsubishi are focusing on future technologies such as electric mobility, connected cars, and autonomous driving along with fulfilling current demand for hot-selling models in today’s market. In addition, Ghosn’s team is focused on solidifying the group’s foot print in various markets around the world.
“This is much more important than to be particularly attentive to what the competition is doing,” Ghosn said.
In February, Ghosn announced that he will be step down as Nissan’s CEO effective April 1, 2017 and hand over the chief executive role to his former co-CEO Hiroto Saikawa.