General Motors chief executive Mary Barra has told employees combining GM’s European Opel and Vauxhall business with Peugeot would be beneficial for both companies.

“While there can be no assurance of any agreement, any possible transaction would enable PSA Groupe and Opel Vauxhall to leverage their complementary strengths, enhancing their competitive positions for the future in a rapidly changing European market,” Barra said in message to staff, according to extracts of the message seen by the Reuters news agency.

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Barra urged employees not to let speculation about Opel’s fate distract the carmaker from carrying out its business.

Barra concluded by saying that no additional information could be provided at this point, “because we are simply not at that point in our discussions”.

Meanwhile, GM and PSA Group posted weaker European sales in January than any other major carmaker.

A combination between GM and PSA would create a manufacturer with about 16% of the European passenger car market, ahead of Renault and behind Volkswagen, Reuters noted.

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New passenger car registrations at PSA, including the Peugeot, Citroen and DS brands in the European Union and the European Free Trade Association, rose 6.5% in January, compared with 5.3% for GM’s Opel and Vauxhall brands, the Association of European Carmakers (ACEA) said on Thursday.

Volkswagen (VW) group, nearly a year and a half after its emissions scandal came to light, achieved 10% growth last month, as did Renault, according to Brussels-based ACEA.

Fiat Chrysler Automobiles saw a 15% rise while Ford’s was 9.5%.

Overall registrations in the region jumped 10% on extra selling days to 1.204m vehicles from 1.094m a year earlier, ACEA said.