Peugeot and General Motors posted weaker than average European car sales growth at the start of 2017, as the French carmaker proceeds with talks to buy up the US group’s European business.

Latest data for the EU showed new registrations at PSA Group, the maker of Peugeot and Citroen, rose 6.5 per cent in January and were up 5.3 per cent up at Opel Group – the German brand which owns Vauxhall and Opel. The performance of both companies lagged behind a wider 10.3 per cent rise in new car registrations in the EU last month, according to the European Automobile Manufacturers Association.

Earlier this week, it was announced that PSA Group and GM were in talks to explore “numerous strategic initiatives to improve profitability and operational efficiency, including a potential acquisition of Opel”. The news has raised concern over the future of Opel’s two UK plants which employ 3,500 staff.

PSA had a 10.1 per cent market share in the EU as of January, with Opel at 6.3 per cent according to the ACEA. Volkswagen group – Europe’s largest carmaker – enjoyed a 10 per cent rise in new registrations last month compared to 2016 with Fiat Chrysler Group up 15.2 per cent and Ford boosted by a 9.5 per cent climb.

Overall EU car sales were up by 1.17m in the month as the bloc has enjoyed a steady economic recovery in the last few months, marked by higher consumer spending.

In the eurozone’s two largest member states, Germany and France, sales by 10.5 per cent and 10.6 per cent respectively. The UK however posted the weakest pace of growth of the EU’s five biggest economies at just 2.9 per cent.

Still, Britain’s robust car industry has defied expectations to continue growing at the start of the year and hitting the highest overall level since 2005 at 174,564.

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