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Jobs cuts help Opel-Vauxhall return to profit for first time in 20 years

7:27 pm, 24th July 2018

The Anglo-German car manufacturer made an operating profit of €502m (£447m) and revenue of €9.9bn (£8.8bn) in the six months to 30 June.

Under the ownership of General Motors, Opel-Vauxhall posted a 2016 full-year loss of €257m. The US auto giant last saw a profit from Opel-Vauxhall in 1999.

After that, it struggled amid intense competition and overproduction in Europe’s car industry.

PSA Group, which owns Peugeot and Citroen, bought Opel-Vauxhall for $1.9bn from General Motors last year – creating Europe’s second largest car maker.

PSA chief executive Carlos Tavares, who has been credited with turning around the fortunes of the French car maker, which was on the brink of bankruptcy in 2014, has cut 3,700 jobs from Opel-Vauxhall’s German business.

A further 250 jobs were axed at Vauxhall’s Ellesmere Port factory. PSA safeguarded 1,400 jobs at its Luton plant with its decision to build the new Vivaro vehicle.

PSA Group said its first-half net income rose 18% to €1.48bn, as revenue jumped 40% to €38.6bn.

The company sold a record 2.2 million vehicles in the first six months, as the firm cranked out its popular Peugeot 3008 and 5008 SUVs.

Mr Tavares said: “The group demonstrates since 2014 its recurring ability to level up global profitability, efficiency and volumes, despite strong headwinds.

“Opel Vauxhall teams start to deliver good results to build the New Opel Vauxhall and are eager to unleash further potential.

“Our agility and strong focus on execution remain a strong asset to reach our targets.”

Shares in PSA soared as much as 12.6% to their highest since 2008 and were up 10.9% in midday trading in Paris.