PSA, the parent company of Peugeot, is in talks to buy Opel-Vauxhall

GM Holden's plans to buy new models from its European subsidiaries may come into question after yesterday's news that Peugeot and Citroen's parent company PSA Group is in talks to buy subsidiaries of Opel and Vauxhall.

General Motors - the owner of automotive brands Holden, Opel and Vauxhall - and the French group PSA released a statement last night announcing that they are "exploring numerous strategic initiatives to improve profitability and operational efficiency, including the potential acquisition of Opel."

Although PSA has stated that "there is no guarantee that an agreement will be reached," PSA and GM have been known to collaborate on projects since the alliance agreement was signed in 2012.

If PSA does take control of Opel-Vauxhall, it will retain the PSA Group's position as the world's ninth largest automaker, but move closer to Honda's eighth with an annual production of 4.3 million vehicles. PSA-Opel-Vauxhall's combined annual sales, based on 2016 data, would be around 4.15 million vehicles.

The announcement likely comes as GM reported a sixteenth straight annual loss from its European Opel-Vauxhall operations, although the launch of the new Astra improved sales and cut the loss to US$257 million (AU$335 million).

The move is unlikely to disrupt Holden's short-term supply deals.

GM said it would have had a neutral financial performance but was affected by the financial impact of the UK's Brexit vote.

The Opel-Vauxhall PSA takeover will affect Holden, which is dependent on European factories to supply more models for its Australian network as it winds down production in Australia this year.

The next generation Astra and Commodore based on the Opel Insignia, which will be unveiled in Europe at the Geneva Motor Show next month, could fall under PSA control if GM hands over the factories to PSA.

But the move is unlikely to disrupt Holden's short-term supply deals, as both PSA and GM would like to maintain production volumes and plant revenues.

Holden communications director Sean Poppitt said GM remains committed to the Holden brand in Australia and Holden does not expect any changes to Holden's vehicle portfolio.

“Right now we are focusing on scaling up the Astra and getting ready to launch the fantastic next generation Commodore in 2018,” he said.

While the details of any new ownership structure are being kept under wraps, GM is likely to retain a large stake in the new European venture.

Since 2012, PSA and GM have been working together on new car projects in an effort to cut costs, despite GM selling its 7.0 percent stake in PSA to the French government in 2013.

Two new Opel/Vauxhall SUVs are based on PSA platforms, including the small 2008 Peugeot-based Crossland X unveiled in January and the 3008-based midsize Grandland X due to be revealed soon.

Opel-Vauxhall and PSA have suffered serious financial losses in recent years. PSA was rescued by the French government and PSA's Chinese joint venture partner Dongfeng Motor, who acquired 13% of the company in 2013.

It is possible that Dongfeng is pushing for a takeover, as it is unlikely that the French government or the Peugeot family, which owns 14% of PSA, will fund the Opel-Vauxhall expansion.

Last year, Dongfeng produced and sold 618,000 Citroen, Peugeot and DS vehicles in China, making it PSA's second largest market after Europe with sales of 1.93 million in 2016.