IF it buys JLR, PSA would gain three premium brands, engine and assembly plants in England and additional factories in Slovakia, China and Brazil (current owner Tata does local assembly for India in its own plant)

IF it buys JLR, PSA would gain three premium brands, engine and assembly plants in England and additional factories in Slovakia, China and Brazil (current owner Tata does local assembly for India in its own plant)

Is Tata Motors mulling putting Jaguar Land Rover up for sale and would PSA buy it to expand both its global manufacturing footprint and into the premium arena? That was the question being asked this week as rumours swirled around the UK-based automaker.

As our (French speaking) Simon Warburton noted in his story yesterday: "Reports are circulating in the UK JLR could be sold as the Tata Motors-owned British manufacturer looks to arrest sales falling 5.8% year-on-year, with the China market plunging 34% reflecting weaker conditions [since updated today to "down 9.1%" after the April results were in]. The rumours mention an apparent document examining any potential benefits from a merger of JLR with PSA. "As we have always said, in principle we are open to opportunities which could create long-term value for Groupe PSA and its shareholders," a PSA spokesman told just-auto. "As for the document, we have no knowledge of a document of this type." Tata Motors was not immediately available for comment.

The 'document examining any potential benefits from a merger of JLR with PSA' was reported on Thursday by the UK's Press Association. But Tata Motors said in a statement cited by the Guardian: "As a matter of policy, we do not comment on media speculation. But we can confirm there is no truth to these rumours." A PSA Group spokeswoman told the paper the company was "open to all opportunities that would create value on a long-term basis" but said there was "no hurry" for PSA to make an acquisition of JLR or any other carmaker. The paper had also noted PSA boss Carlos Tavares last month had made clear he would consider a bid for JLR, among other carmakers, but did not want such a deal to be a "distraction".

One could take a 'no smoke without fire' approach to such reports but top automaker executives talk regularly to each other, strategy papers are researched, rumours of planned deals circulate and, sometimes, what is rumoured actually happens. There's been other occasional talk of big mergers (looking at you, FCA's late Sergio Marchionne) but it's rare for rumour to turn to factual announcment. PSA's last big buy was GM's Opel/Vauxhall European operations, which it is still successfully digesting (one rumour [that Peugeot's 308 will be built in Opel and Vauxhall plants]; one announcement just this week), so let's see.

That announcement was an interesting development anyway. GM had for a number of years, shared several sizes of light(ish) Opel and Vauxhall branded vans with Renault and Nissan in Europe. Now they and their English plant are owned by PSA, the French automaker is in the process of shifting these vans on to shared PSA platforms and re-jigging their associated source plants. As a start, PSA this week announced it would produce large vans at the Gliwice plant in Poland by the end of 2021 due to LCV capacity constraints elsewhere in its manufacturing network. It said the SevelSud plant (FCA/PSA joint venture located in Val di Sangro, Italy) has exceeded its manufacturing capacities over the last three years with the production of the Peugeot Boxer, Citroen Jumper and Fiat Ducato large vans. The company also maintains the transition of the Opel and Vauxhall brands to the shared large vans platform will require additional production capacities so will extend Gliwice - which builds the Astra among other things - to fully utilise its competitiveness. The future of the UK smaller van plant at Luton (which dates back to the Isuzu-Bedford (IBC) joint venture days in the early 1980s - was determined earlier and it will switch its Opel/Vauxhall products fully to PSA platforms and brands once the current Renault Trafic-based Vivaro, in production since 2014, is replaced.

The big 'uns, Renault's Master and Opel/Vauxhall's Movanos, are currently made by Renault but will be replaced by that new Gliwice made large van line from 2021. And somewhere in all of that, PSA is still finding time and capacity to supply Toyota with two Spanish and French-made light vans, as the French side exits the Czech small car JV.

Honda, as part of its results announcement (profits dragged down by restructuring and unfavourable exchange rates), detailed more of its planned restructuring and electrification plans. A new model programme will reduce the total number of trim and option variants of global models to one-third by 2025 and the automaker will increase efficiency by eliminating and consolidating some similar regional models into "even more competent models shared across multiple regions". The current five global models, Civic, Accord, CR-V, Fit/Jazz and Vezel/HR-V, currently account for 60% of global sales while regional models such as the N Series for Japan, Pilot for North America and Crider for China are said to be driving growth in each region. The company adopted a new operational structure for its automobile unit from April and began reviewing and sharing the product line by grouping some of its six regions outside Japan based on a similarity of key factors, such as market needs and environmental regulations. It has also introduced the so-called Honda Architecture in new product development to increase the efficiency of development and expand parts-sharing for mass-production models. And it will roll out its (much more of a rival to Toyota's hybrids) i-MMD2 2-motor hybrid system to the entire range, starting with the redesigned Fit/Jazz we'll see at the Tokyo show in October.

UK sales continued to slide in April with the SMMT noting that recent cuts in government subsidies hit PHEV volume in particular. Mitsubishi, whose Outlander EV has been a big hit in the sector, said action was needed to boost sales of plug-in hybrid electric vehicles (PHEVs) in Britain as the segment contracted following the withdrawal of purchase grants. The distributor said pure electric vehicles account for around 1% of the car market and maintains the UK government "massively underestimates benefits of PHEVs". It reckons half of average weekly mileage for PHEVs is in EV mode – improving CO2 emissions and improving air quality in high-traffic areas. Coincidentally (or not), the European Automobile Manufacturers' Association (ACEA) chimed in, highlighting the correlation between the affordability of electric cars and their market uptake. The analysis compared national data on the sales of electrically-chargeable vehicles (ECVs) with GDP per capita in the EU member states for full year 2018. The data showed all countries with an ECV market share of less than 1% – half of all EU member states – have a GDP per capita below EUR29,000.

Bottom line: EVs are still too expensive for the masses but - remember the prices of the first mobile phones and flat TVs? - they will, I guess, continue to both come down and go further.

Have a nice weekend.

Graeme Roberts, Deputy Editor, just-auto.com

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