Opel Extends South America Business: Brand launch in Colombia and Ecuador

• Renowned import partners secured
• Export to Colombia and Ecuador from summer of 2020
• Market entry with four models: Opel Crossland X, Grandland X, Combo and Vivaro
• More model launches in the near future
• Profitable sales in new export markets key pillar of PACE! company plan

Opel is continuing its export offensive. Rüsselsheim-based carmaker is extending its business in South America and will be entering the Colombian and Ecuadorian markets as of the summer of this year. Opel has already signed agreements with renowned importers SKBerge and Nexumcorp, who will become the exclusive sales partners for the Colombian and Ecuadorian markets respectively.

Opel Grandland X SUV

Brand with the Blitz will enter the two new markets with an initial offering comprising of four models: successful Opel Crossland X and Grandland X SUVs, multifunctional Opel Combo Cargo and the highly flexible Opel Vivaro van. Opel’s perennial bestseller, the new Corsa, will follow shortly.

Opel Crossland X 

“Colombia and Ecuador are very interesting markets and will provide us with additional momentum. Obviously, being a German brand is a major advantage when entering these markets because German engineering is also synonymous with quality in South America. We can also benefit from the existing Groupe PSA infrastructure and the very positive dynamic of the group’s other brands in both countries,” said Michael Lohscheller, CEO Opel Automobile GmbH and member of the Groupe PSA Managing Board. “Like in every market, our top priority in South America is profitable growth with a high level of customer satisfaction.”

Opel Combo Cargo

Opel Vivaro van

An extensive export offensive is a key pillar of Opel/Vauxhall’s company plan PACE! that ensures sustainable profitability for the company. plan includes the clear goal of achieving 10 percent of sales in markets outside of the traditional core European markets by the mid-2020s. To this end, Opel is strengthening its presence in Asian, African and South American markets with new and renowned partners. In addition, the carmaker will enter 20 new export markets by 2022, one of these being the Russian market where the brand recently celebrated its comeback.

PACE! plan

Groupe PSA and FCA agree to merge

New entity will have the leadership, resources and scale to be at the forefront of a new era of sustainable mobility

• Combines companies’ extensive and growing capabilities to address the challenge of shaping the new era of sustainable mobility
• Combined company will be the 4th largest global OEM by volume and 3rd largest by revenue with annual sales of 8.7 million units and combined revenues of nearly €170 billion [1]
• Creates a diversified business with among the highest margins in its core markets of Europe, North America and Latin America and the opportunity to reshape the strategy in other regions
• Merger will deliver approximately €3.7 billion estimated annual run-rate synergies with no plant closures resulting from the transaction – synergies are expected to be net cash flow positive from year 1
• Strong combined balance sheet and high level of liquidity provide financial flexibility with an investment grade credit rating expected
• Combined company will leverage investment efficiency across a larger scale to develop innovative mobility solutions and cutting edge technologies in new energy vehicles, autonomous driving and connectivity
• Broad portfolio of well-established iconic brands offering best-in-class products covering key vehicle market segments and delivering higher customer satisfaction
• Excellent working relationship between the two management teams, which share successful track records in turnarounds, value creation and successful OEM combinations
• Strong governance structure to underpin combined company performance with John Elkann as Group Chairman and Carlos Tavares as Group CEO, with a majority of independent directors [2]
• Strong support of long-term shareholders (EXOR N.V., Peugeot Family Group, Bpifrance [3] who will be represented on the Board

Fiat Chrysler Automobiles N.V. (“FCA”) (NYSE: FCAU / MTA: FCA) and Peugeot S.A. (“Groupe PSA”) have today signed a binding Combination Agreement providing for a 50/50 merger of their businesses to create the 4th largest global automotive OEM by volume and 3rd largest by revenue. The proposed combination will be an industry leader with the management, capabilities, resources and scale to successfully capitalize on the opportunities presented by the new era in sustainable mobility.

With its combined financial strength and skills, the merged entity will be particularly well placed to provide innovative, clean and sustainable mobility solutions, both in a rapidly urbanizing environment and in rural areas around the world. The gains in efficiency derived from larger volumes, as well as the benefits of uniting the two companies’ strengths and core competencies, will ensure the combined business can offer all its customers best-in-class products, technologies and services and respond with increased agility to the shift taking place in this highly demanding sector.

The combined company will have annual unit sales of 8.7 million vehicles, with revenues of nearly €170 billion[ 4], recurring operating profit of over €11 billion [5] and an operating profit margin of 6.6%, all on a simple aggregated basis of 2018 results [6]. The strong combined balance sheet provides significant financial flexibility and ample headroom both to execute strategic plans and invest in new technologies throughout the cycle.

The combined entity will have a balanced and profitable global presence with a highly complementary and iconic brand portfolio covering all key vehicle segments from luxury, premium, and mainstream passenger cars through to SUVs and trucks & light commercial vehicles. This will be underpinned by FCA’s strength in North America and Latin America and Groupe PSA’s solid position in Europe. The new Group will have much greater geographic balance with 46% of revenues derived from Europe and 43% from North America, based on aggregated 2018 figures of each company. The combination will bring the opportunity for the new company to reshape the strategy in other regions.

The efficiencies that will be gained from optimizing investments in vehicle platforms, engine families and new technologies while leveraging increased scale will enable the business to enhance its purchasing performance and create additional value for stakeholders. More than two-thirds of run rate volumes will be concentrated on 2 platforms, with approximately 3 million cars per year on each of the small platform and the compact/mid-size platform.

These technology, product and platform-related savings are expected to account for approximately 40% of the total €3.7 billion in annual run-rate synergies, while purchasing - benefiting principally from scale and best price alignment - will represent a further estimated 40% of the synergies. Other areas, including marketing, IT, G&A and logistics, will account for the remaining 20%. These synergy estimates are not based on any plant closures resulting from the transaction. It is projected that the estimated synergies will be net cash flow positive from year 1 and that approximately 80% of the synergies will be achieved by year 4. The total one-time cost of achieving the synergies is estimated at €2.8 billion.

Those synergies will enable the combined business to invest significantly in the technologies and services that will shape mobility in the future while meeting the challenging global CO2 regulatory requirements. With an already strong global R&D footprint, the combined entity will have a robust platform to foster innovation and further drive development of transformational capabilities in new energy vehicles, sustainable mobility, autonomous driving and connectivity.

The merged entity will benefit from an efficient governance structure designed to promote effective performance, with a Board comprised of 11 members, the majority of whom will be independent [7]. Five Board members will be nominated by FCA and its reference shareholder (including John Elkann as Chairman) and five will be nominated by Groupe PSA and its reference shareholders (including the Senior Non-Executive Director and the Vice Chairman). At closing the Board will include two members representing FCA and Groupe PSA employees [8]. Carlos Tavares will be Chief Executive Officer for an initial term of five years and will also be a member of the Board.

Carlos Tavares, Mike Manley and their executive teams have a strong track record in successfully turning around companies and combining OEMs with diverse cultures. This experience will support the speed of execution of the merger, underpinned by the companies’ strong recent performances and already robust balance sheets. The merged entity will maneuver with speed and efficiency in an automotive industry undergoing rapid and fundamental changes.

The new group’s Dutch-domiciled parent company will be listed on Euronext (Paris), the Borsa Italiana (Milan) and the New York Stock Exchange and will benefit from its strong presence in France, Italy and the US.

Under the proposed by-laws of the combined company, no shareholder would have the power to exercise more than 30% of the votes cast at shareholders’ meetings. It is also foreseen that there will be no carryover of existing double voting rights but that new double voting rights will accrue after a three-year holding period after completion of the merger.

A standstill in respect of the shareholdings of EXOR N.V., Bpifrance [9], Dongfeng Group (DFG) and the Peugeot Family (EPF/FFP) will apply for a period of 7 years following completion of the merger, except that EPF/FFP will be permitted to increase its shareholding by up to a maximum of 2.5% in the merged entity (or 5% at the Groupe PSA level) by acquiring shares from Bpifrance and/or DFG and/or on the market [10]. EXOR, Bpifrance and EPF/FFP will be subject to a 3-year lock-up in respect of their shareholdings except that Bpifrance will be permitted to reduce its shareholdings by 5% in Groupe PSA or 2.5% in the merged entity. DFG has agreed to sell, and Groupe PSA has agreed to buy, 30.7 million shares prior to closing (those shares will be cancelled). DFG will be subject to a lock up until the completion of the transaction for the balance of its participation in Groupe PSA, resulting in an ownership of 4.5% in the new group.

EXOR, Bpifrance, the Peugeot Family and Dongfeng have each irrevocably committed to vote in favor of the transaction at the shareholders’ meetings of FCA and Groupe PSA.

Before closing, FCA will distribute to its shareholders a special dividend of €5.5 billion while Groupe PSA will distribute to its shareholders its 46% stake in Faurecia. In addition, FCA will continue work on the separation of its holding in Comau which will be separated promptly following closing, for the benefit of the shareholders of the combined company. This will enable the combined group’s shareholders to equally share in the synergies and benefits that will flow from a merger while recognizing the significant value of both Groupe PSA and FCA’s assets and strengths in terms of market share and brand potential. Each company intends to distribute a €1.1 billion ordinary dividend in 2020 related to fiscal year 2019, subject to approval by each company’s Board of Directors and shareholders. At closing, Groupe PSA shareholders will receive 1.742 shares of the new combined company for each share of Groupe PSA, while FCA shareholders will have 1 share of the new combined company for each share of FCA.

Completion of the proposed combination is expected to take place in 12-15 months, subject to customary closing conditions, including approval by both companies’ shareholders at their respective Extraordinary General Meetings and the satisfaction of antitrust and other regulatory requirements.

Groupe PSA CEO Carlos Tavares and FCA CEO Mike Manley

Carlos Tavares, Chairman of the Managing Board of Groupe PSA, said: “Our merger is a huge opportunity to take a stronger position in the auto industry as we seek to master the transition to a world of clean, safe and sustainable mobility and to provide our customers with world-class products, technology and services. I have every confidence that with their immense talent and their collaborative mindset, our teams will succeed in delivering maximized performance with vigor and enthusiasm.”

Mike Manley, Chief Executive Officer of FCA, added: “This is a union of two companies with incredible brands and a skilled and dedicated workforce. Both have faced the toughest of times and have emerged as agile, smart, formidable competitors. Our people share a common trait - they see challenges as opportunities to be embraced and the path to making us better at what we do."

[1] Represents FCA Net Revenues, excluding Magneti Marelli, and Groupe PSA Revenue excluding Faurecia Revenue to Third Parties

[2] In compliance with the Dutch corporate governance code

[3] Bpifrance shall include jointly Bpifrance Participations S.A. and its wholly-owned subsidiary Lion Participations SAS

[4] Represents FCA Net Revenues, excluding Magneti Marelli, and Groupe PSA Revenue excluding Faurecia Revenue to Third Parties

[5] Represents FCA Adjusted EBIT, excluding Magneti Marelli, and Groupe PSA Recurring Operating Income excluding Faurecia

[6] Excluding Faurecia and Magneti Marelli

[7] To meet the objective of having a “majority of independent directors”, 5 out of 9 non-executive directors need to be independent

[8] Employee representatives would be defined based on legal requirements at all levels

[9] Bpifrance shall include jointly Bpifrance Participations S.A. and its wholly-owned subsidiary Lion Participations SAS

[10] Up to 1% of the shares of the merged entity plus the percentage of shares sold by Bpifrance, other than to the Peugeot Family (subject to the overall maximum of 2.5%)

!NEW! GM Sold 7.2 Million Vehicles in the First Nine Months of 2015

General Motors Co. (NYSE: GM) sold 7.2 million vehicles globally in the first nine months of 2015. The company posted sales increases in four of its five largest markets, with record sales in China and strong retail sales gains in the United States. Total sales were down 1 percent, due primarily to the company’s previously announced decisions to strategically reduce its presence in certain markets, as well as difficult market conditions in South America.

“Our unwavering focus on the customer is paying off in our largest and most important markets as we execute one successful launch after another in the right segments,” said GM President Dan Ammann. “At the same time, we have reacted quickly to challenging macroeconomic environments in other markets and have shown the discipline to exit situations where we see no long-term path to acceptable returns.”

Examples of GM’s recent success include:

• GM truck sales in North America were up 16 percent in the first nine months of 2015, driven by a 17 percent increase in Chevrolet truck deliveries in the United States.
• Chevrolet had record crossover sales in North America in the same period, up 17 percent year over year.
• In China, crossovers like the Chevrolet Trax and Buick Envision represented more than 17 percent of sales by GM and its joint ventures in September, up from 6 percent a year ago.
• Cadillac had record sales in China with deliveries rising 12 percent to nearly 57,000 units.

GM is preparing to launch even more new trucks and crossovers during the next several months, including the all-new Cadillac XT5, a redesigned Chevrolet Silverado and a diesel-powered Chevrolet Colorado for North America, and the Baojun 560 in China. Key car launches include the all-new Chevrolet Malibu and Cruze in North America and the all-new Opel Astra in Europe.

Additional Highlights (vs. 2014)

First Nine Months 

• In the United States, Chevrolet has reported six consecutive months of retail sales and market share gains and has strategically reduced sales to rental companies by more than 50,000 units through September.
• Opel / Vauxhall increased its European market share and grew sales in 19 countries, including Italy, Spain, France, the U.K. and Germany.
• Buick had record deliveries in China, with sales up 4 percent to nearly 670,000 units.
• Baojun had record sales, with deliveries rising 236 percent to more than 270,000 units.
• GMC’s global sales increased 11 percent, and four of the brand’s SUVs and pickup trucks – the Yukon, Yukon XL, Sierra and Canyon – have the highest average transaction prices of any vehicles in their respective segments in the United States, according to J.D. Power PIN estimates.

Third Quarter

• Among GM’s largest markets, sales rose in the United States, the U.K. and Canada.
• Opel / Vauxhall, Buick, Cadillac, GMC and Baojun all reported higher sales.
• Chevrolet had record crossover sales in the United States, up 24 percent, while Chevrolet U.S. truck sales increased 16 percent.
• Deliveries in South Korea were up 11 percent to record of nearly 43,000 units.
• Global sales were down 3 percent.  

GM Global Sales: January - September 2015

Calendar Year-to-Date
Region	Total  Sales	YOY Change	Pct. Change	Total  Sales	YOY Change	Pct. Change
GM North America	930,758	46,110	5.2%	2,685,342	126,257	4.9%
GM Europe	287,690	3,137	1.1%	898,236	(60,131)	(6.3%)
GM South America	150,142	(66,956)	(30.8%)	485,557	(156,749)	(24.4%)
GM International	191,847	(21,928)	(10.3%)	589,854	(41,525)	(6.6%)
GM China **	773,226	(33,902)	(4.2%)	2,492,428	38,215	1.6%
Total	2,333,663	(73,539)	(3.1%)	7,151,417	(93,933)	(1.3%)

Quarter 3				Calendar Year-to-Date
Sales by Brand **	Total  Sales	YOY Change	Pct. Change	Total  Sales	YOY Change	Pct. Change
Chevrolet	1,078,847	(112,998)	(9.5%)	3,291,133	(252,280)	(7.1%)
Opel/Vauxhall	272,619	14,007	5.4%	864,338	31,256	3.8%
Buick	300,335	10,858	3.8%	852,289	21,635	2.6%
Cadillac	67,895	997	1.5%	198,993	6,228	3.2%
GMC	176,222	11,100	6.7%	499,343	48,933	10.9%
Baojun	110,977	69,395	166.9%	270,488	189,857	235.5%
Wuling	286,155	(55,358)	(16.2%)	1,050,327	(100,110)	(8.7%)
All Others	40,613	(11,540)	(22.1%)	124,506	(39,452)	(24.1%)
Total	2,333,663	(73,539)	(3.1%)	7,151,417	(93,933)	(1.3%)

Notes:

GM North America = United States, Canada, Mexico, and other North American markets*

GM Europe = Western, Central and Eastern Europe

GM International = Asia-Pacific, Africa and the Middle East*

** Includes China retail sales

* Cuba, Iran, North Korea, Syria and Sudan are excluded from sales volume calculations

!NEW! General Motors Outlines Strategic Plan

General Motors CEO Mary Barra talks with media Wednesday, October 1, 2014, before outlining the company's customer-focused strategic plan to become the most valued automotive company, at a conference for investors and financial analysts at the General Motors Milford Proving Grounds in Milford, Michigan

General Motors Co. (NYSE: GM) CEO Mary Barra and her executive leadership team outlined the company’s customer-focused strategic plan to become the most valued automotive company at a conference for investors and financial analysts today at the company’s Milford Proving Ground.

GM CEO Mary Barra

“In the nine months that this leadership team has been together, we have spent a significant amount of time setting our goals for the future of GM and developing a specific action plan,” Barra said. “Our strategic plan is a pathway to earn customers for life and create significant shareholder value in the process. Every chance to connect with a customer is an opportunity to build a stronger relationship.”

GM’s strategic plan includes several major initiatives that the company anticipates will help it achieve 9- to 10-percent margins on an EBIT-adjusted basis by early next decade.

• Lead in Product and Technology: In 2015, about 27 percent of GM’s global sales volume is expected to come from products new or refreshed within 18 months. That figure is expected to rise to 38 percent in 2016 and 2017, and reach 47 percent in 2019.

During the same time frame, GM plans to execute the world’s largest automotive deployment of 4G LTE high-speed mobile broadband, introduce vehicle-to-vehicle connectivity in the 2017 Cadillac CTS and launch a highly automated driving technology currently called Super Cruise, which allows for extended periods of hands-free driving on highways.

GM has also developed an innovative Mixed Material Body Structure that uses GM-patented welding technology and a combination of steel and aluminum stampings, castings and extrusions to deliver designs that are lightweight, use 20 percent fewer parts, have class-leading torsional stiffness and exhibit superior noise and vibration characteristics.

• Grow Cadillac: GM is establishing its flagship brand as a separate business unit headquartered in New York City to pursue growth opportunities in the luxury market with more focus and clarity. Cadillac expects to introduce four new vehicles in North America in 2015, including the recently announced CT6. In addition, Cadillac plans to introduce nine new models in the next five years in China, which is expected to become the world’s largest luxury car market later this decade.

• Continue Growing in China: GM’s joint ventures in China are planning to invest $14 billion from 2014 through 2018 to open five new vehicle- manufacturing plants and support sales of just under 5 million vehicles annually. In the same time frame, GM expects to launch 60 new or refreshed vehicles, including nine new sport utility vehicles.

• Continue Growing GM Financial: GM Financial, which has seen its earning assets grow from $8.7 billion in 2010 to $37 billion today, continues to invest to support the sale of new GM cars, trucks and crossovers around the world. GM Financial has sharply increased the number of GM customers it serves in the United States, Canada, South America and Europe. Later this year, GM Financial expects to enter the growing Chinese market.

• Deliver Core Operating Efficiencies: GM’s strategy to improve relationships with suppliers, derive more global volume from fewer vehicle architectures and lower enterprise costs for material and logistics is expected to deliver significantly better variable margins on upcoming high-volume product launches, including the Opel/Vauxhall Corsa and Astra in Europe, and the Chevrolet Cruze and Malibu in North America. By 2020, the company expects that about 99 percent of global production will be on core architectures.

Mid-decade Financial Targets

During the meeting, GM also reaffirmed the company’s previously announced near-term financial targets:

• In North America, the company expects to achieve EBIT-adjusted margins of 10 percent in 2016.
• In Europe, the company expects to return to profitability in 2016.
• In China, the company expects that its joint ventures will maintain net income margins in the 9- to 10-percent range. 
• In South America, the company’s core operations continue to improve as a result of recent product launches and material and logistics optimization. 
• GM continues to address challenges in its international operations outside of China, including brand strategy, cost structure and sourcing to return to consistent profitability.

GM intends to return excess cash flow to stockholders primarily through strong and growing dividends based on sustained improvements in the company’s underlying financial performance.