PSA Group has revealed that it is in discussions with General Motors, exploring the potential for an acquisition of Opel and Vauxhall.

It noted that it was exploring ‘numerous’ strategic initiatives aimed at improving profitability and operational efficiency, and that at this stage there was no assurance that an agreement would be reached.

The company said it had been working with General Motors since 2012, and the two have to date implemented three projects in Europe, generating ‘substantial synergies for the two groups.’

The move would immediately make PSA one of the largest manufacturers in both the UK and European markets. In the UK, Vauxhall is the second largest manufacturer, and sold over a quarter of a million cars in in 2016. The Corsa was the second bestselling model in the UK in the year.

Across Europe, Opel Group sold 979,427 cars in 2016, while PSA sold 1,446,052 cars. The two combined had a market share of 16.6% across the continent, meaning if the deal were to go ahead, the combined manufacturing Group would be second only to VW Group in size.