Why GM Wants Out of Europe After Nearly 90 Years: QuickTake Q&A

PSA Group, the maker of Peugeot and Citroen cars, agreed to buy General Motors Co.’s German division Opel and U.K. sister nameplate Vauxhall in a deal valued at 2.2 billion euros ($2.3 billion). The takeover is set to transform the European vehicle market, creating the region’s second-largest automaker by unit sales.

GM first bought a stake in Opel in 1929, when the automaker was Germany’s biggest. In the past two decades, the Detroit-based manufacturer has struggled to revive the European unit, which posted losses totaling about $20 billion since 1999. Future prospects remain challenging, given Opel is a volume carmaker with low profit margins producing vehicles in countries with high labor costs, including Germany, Spain and the U.K. The regional market is also saturated, with too much production capacity for the number of cars sold annually.