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Opel Australia dealers walked into last Friday’s meeting in Melbourne expecting exciting news about new vehicles and fresh marketing direction.

“We all went there with a great air of anticipation,” one metropolitan Opel dealer principal, who asked to remain anonymous, told CarAdvice.

“We had believed that we were going to a meeting to outline new model plans, new marketing direction, new strategy, because certainly in the pipeline to launch was the new Zafira (pictured below) and the Mokka, and the invitations were issued on that basis, so we were all very excited at the meeting at the prospect.”

The reality could not have been more different.

“The meeting started at 1pm,” said the dealer. “It was scheduled to finish at 4pm. We were on the streets at 1:45pm.

“It was made very clear. [Opel Australia managing director] Bill Mott stood up there and immediately said the reason for the meeting is that we’re announcing that we’re closing down, which was a surprise to us all.

“Clearly dealers were losing money and it was a big financial strain for Opel, but to pull the pin after a year is very surprising. Normally you’d give it a couple of years.”

opel-zafira

The dealers weren’t the only ones surprised by the announcement. Opel Australia marketing and public relations boss Michelle Lang said she was made aware of the decision to close down the German company’s local operations last Tuesday night.

“I was working away on my presentation thinking we were talking about a Mokka launch,” Lang said.

“We had presentations prepared to that effect, that was the purpose of the meeting, but obviously that purpose was superseded by the more pressing message once it was made and communicated to us. [The dealers’] expectations were in line with a lot of our expectations.

“We could have either rung them before without any answers or worked our tails off and try to have answers for them on Friday, which is what we did.

“It’s unfortunate how quickly it all happened.”

opel-corsa-range

In an official statement on Friday, Opel said that in order to be competitive it would need to cut the price of its core models significantly, resulting in a business case that was not financially viable for either the company or its 20 Australian dealers.

One of those dealers told CarAdvice they believed the catalyst for the closure decision was Opel’s inability to get the pricing right for it’s core model, the Astra.

“When they set up here they assumed they would achieve a price premium,” the dealer said.

“If they’ve learnt anything in the year of trading – certainly on Astra – is that the price premium isn’t there. It’s a $19,990 market. If you can’t start at $19,990 you’re just not in the hunt, and the point was made that in all their analysis and planning they just could not get Astra to that price point, or if they could it just didn’t make economic sense, so the whole basis of the business wasn’t there.

“And that’s really the key: when they couldn’t get the core product to the right price point, the whole deck of cards fell down. It really was as simple as that.”

The dealer admitted Opel was “perhaps a little naïve” in its strategy heading into the Australian market.

“The target brand for them would have been Volkswagen, and Volkswagen achieve a little bit of a premium, but nothing too dramatic.

“I think they assumed they could achieve whatever premium Volkswagen was achieving but that was not the case.”

opel-astra-range

The Astra was priced from $23,990 before on-road costs, making it some $2500 more expensive than the entry-level Volkswagen Golf 90TSI. Opel sold 758 Astras between January and July, giving it a meagre 0.5 per cent share of the 145,858-unit sub-$40K small car segment.

One dealer told CarAdvice his and every other Opel dealership operated at a loss simply because they could not sell enough cars.

“When you take on a new franchise you do your sums based on a certain number of vehicles per month at a certain gross profit per vehicle, and the fundamental volumes were just never there from day one.”

Dealers have been informed they will be compensated for unsold and demonstrator vehicles, as well as parts, tools and signage, but remain in the dark about additional financial support beyond that.

“All of the dealers traded at a loss, so the question mark is whether there will be compensation for trading losses, and that’s what we don’t know,” one dealer said.

“We’ll be out of pocket. We haven’t had that discussion with them yet so we don’t really know how far that will go.”

One dealer said it would also pursue Opel for compensation for the cost of its soon-to-be-empty showroom.

“That will be a discussion point with Opel, yes.”

opel-insignia-range

Lang said details of compensation for dealers were still to be finalised and would be specific to each individual dealer.

“It’s a case-by-case scenario, so we can’t say unequivocally what we’ll do, and I can’t really confirm anything anyway because it’s commercially privileged information as far as what we agree to,” she said.

Lang said Opel’s current focus was to prioritise its customers and dealers to ensure that it met all of its obligations to them.

She said Opel was currently in discussion with sister company Holden’s dealer network about future vehicle servicing, and said while striking an agreement with Holden was “the most likely scenario” it had not been signed off at this stage.

One dealer told CarAdvice the majority of customers had been relatively accepting of the situation.

“The customers that we’ve talked to have been understanding. They’re not feeling abandoned, it’s been quite good.

“It’s very good that you can reassure them that your ongoing parts and service requirements can be met.

“And in terms of resale value, I honestly think that a used Opel in a couple of years time will be good used-car property, because the car is a German-built and -engineered premium car – particularly the OPC models, which are outstanding cars, they’re going to become very good property, they’re going to be quiet well sought after.”

opel-opc-range

One dealer said it planned to continue selling its vehicles at least until the end of the month.

“[Opel has] given us some very attractive liquidation pricing and we’ve had very good reaction from customers on that, and we’re selling cars.

“We sold two cars yesterday and we’ve got a lot of prospects today, so we’re quite confident of being able to [sell] quite a bit of our stock.”

Lang said it was unclear at this stage how long it would take to completely wrap up the local operations.

“It will vary from dealer to dealer and there’s various legal constraints and boundaries that will have an impact on, that so I can’t really comment much further.

“All the Opel dealers are still operational as it stands right now. We need to come up with an agreement to terminate our agreement with them to sell the cars, so until that’s actually happened – and it has been less than a week – the Opel dealers are still operational.”


  • milobob

    Pity, also saw 2 LHD Opel test vehicles in the suburbs of Melbourne a week prior to this.

  • Butch

    they should have given the distribution
    to Ateco and not closed down

    • MisterZed

      Yeah right, just like Ateco stuffed up the Fiat brand in Australia – Punto, Ritmo – all disasters under Ateco, while 500 was almost ignored. Since being factory run, Fiat is doing far better.

  • Jared

    Stupid.
    The only way you could ask more money for these cars was to have built up something called a ‘reputation’. You have to suffer at least a few lean years before you will reap the rewards.
    This is what happens when greedy short sighted fools run a business.

    Outside of a minority group of car enthusiasts, most wouldn’t know that half the Holdens sold in this country were infact rebadged Opels, just like they wouldn’t know they’re all effetively Daewoos now.

    • F1orce

      That’s GM for you. Always in it for the quick buck,

      • wilmers13

        The BIG sticking point was that GM was cashing in on government handouts for GM Holden, ending up with demands for annual wage subsidies. We all know the Holden story now, but when I saw the first Opel ads on TV I was ouraged and contacted a Senator. My question was about the rationale of GM pocketing taxpayers’ money for GM Holden at the same time when they promote GM Opels imported from Germany and/or Spain.
        With Opel apparently never paying any taxes in Germany and having a history of paying employees while they work for the Spanish or American outfit, they do leave a sour aftertaste. Their idea to repatriate jobs from Australia, and maybe trying to import vehicles from the US instead of Germany and Spain is very understandable from their angle.
        How they could gear up for an Opel launch before Holden’s fate was decided and while they were pocketing subsidies – well it’s unethical and called a bad corporate citizen. Whatever money was spent on promoting imported Opels came, in a roundabout sort of way, from the Australian taxpayer. Hello?!

    • horsie

      I think the name Astra and the obvious resemblance to the Holden Astra would spell it out for a lot of people.

      • $29896495

        Look I’ll write it again, Not enough dealers. deliberate or a mistake, That’s the simple reason. Just an example, 100 cars sold through 20 dealers nation wide, 5 times the dealers, = 500 or more cars sold. Most likely more because visibility increases business. They weren’t so expensive that people just weren’t buying them. 4 dealers in easter Sydney for NSW was a major error. But to late now.

        • horsie

          how do you know for sure that every dealer would have sold the same number of cars?

          • $29896495

            Of course you are right, in areas with more buyers Western suburbs for example they could well have sold much more. While I’m replying to you, give me examples of unreliability.

          • horsie

            Where have i said anything about unreliability?
            I was saying that people associate the brand with a run of the mill Holden. Therefor don’t perceive it as a premium brand, which it is not anyway. Holden dropped opels range because it could not make money selling, people were not prepared to pay a higher price and are still not

      • Tone

        … which probably explains why Opel Australia tanked so quickly. Astras have traditionally been poorly made, unreliable garbage. They drive OK, but no better then the respective Golf of the day.

  • Jakewilliam5

    I just don’t understand how many cars they thought they’d sell in their first year. You only have to look at Skoda – another high quality, European brand with a huge financial backing from its parent company – to know that it takes years to become established, and Skoda isn’t even there yet. Renault is probably only JUST there.

    Very disappointing and it actually makes me somewhat depressed, Opels are very nice cars! Hopefully Holden does what Kia is about to do and sell the Euro version as a premium or hotter version of the normal car (Astra vs Cruze/Cee’d vs Cerato). I’d even be satisfied seeing the OPC range sold as HSV’s (albeit with cut prices and manuals on the Insignia). But of course, that’s very unlikely indeed!

    It’s an even bigger shame because I actually started to start seeing them around.

    • diesel

      exactly. Any CEO of a car company who expects results within the first 12 months, should be sacked. A 12 month business plan just goes to show that some people just don’t deserve to be running some of these car companies.

  • filippo

    They should have started without the Insignia. It was stupidly overpriced in its market. Besides that, they should have been able to hold out for a couple of years, as the Mokka and Zafira are great cars. I just don’t understand how they entered the market with such naivety that they priced their models so uncompetitively.

    • euro lover

      The answer to that is in one word…….Golf. Quite simply, Opel priced the Astra to compete with the Mk6 Golf, but hadn’t anticipated VW’s aggressive positioning of the new Mk7 with lower pricing, and a far better equipment and quality level. That was the beginning of the end. I shopped these two cars, and almost went with the Astra (its a great car) , but after trying the new golf, it no longer made any sense in terms of both pricing and design. Thankfully at the eleventh hour I purchased Golf. After reading this article I’m so glad I didn’t buy Astra knowing now they will be obsolete in this country and the horrendous depreciation that will bring. Its a shame though because they are a very good car.

  • Zaccy16

    the astra is a decent car and better than the cruze by far but not as good as a golf, they should have priced say at $21,000 so its between the golf and cruze

    • Neil_Way

      MK7 Golf pricing was definitely a shock to the system for Opel. I’m sure they expected higher pricing and were quickly caught out by the far larger VW network.

      • Zaccy16

        yeah your probably right, the mark 7 golf is alot much more up to date than the astra

    • Guesting

      I test drove an Astra and Cruze SRI back-to-back and the Cruze was a better car, and better value as well.

      • name

        That was my experience as well. The Astra could not compete with the cheaper Cruze.

        • $29896495

          Astra is a better car than the Cruze any day of the week. Your wallet may say otherwise but that in the greater scheme of things doesn’t count against quality.

    • sjdgs

      Did you not read the article? Lower pricing was not viable under their model.

  • Doctor

    I don’t know why the dealers are complaining – Opel is at least putting them out of their misery early. THEY chose to take up the franchises – I don’t complain to the NJC when I back a loser so they should take it on the chin too. Opel was never going to be viable.

  • Neil_Way

    Opel suffered from two issues – intimidation from GM to ensure it didn’t step on Holden’s toes, and an over-confident business strategy.

    The Astra really needed to be priced in line, if not slightly better, than the Golf MK7 is at the moment. Of course this would have then meant that it would been sitting right around the Cruze, a definite no-no. The Insignia had no reason to cost as much as it did (although I’m sure Holden was worried about it taking possible Commodore sales), while the Corsa was simply too old when compared with its popular, far more modern, competition.

    Skoda, Alfa, Fiat, Renault, Citroen, Peugoet, Volvo – all European names that have struggled against the competition, mostly due to the pricing strategies they’ve attempted to go for. Only now are we seeing some movement with Fiat and Alfa due to their recent price adjustments.

    “Semi-premium” European manufacturers will continue to suffer in Australia unless they reassess their marketing strategies and become more realistic with prices.

    • 3D4

      Problem with Skoda at the moment is they have nothing new to offer. Octavia is being replaced by new model in Europe right now (guess it’ll take 6 months minimum to get it here) Superb facelift also way ahead (also being already sold in europe), Yeti – due for facelift too (not yet introduced), Fabia is just tragic car all round and should be replaced with new model completely..

  • O123

    I feel that that from the start they were doomed, the mokka would have saved them, but no adam, no time frame for the cascada and a contempt for Australians with pricing. Opel is not premium in any way. They are well built cars,

  • il

    If they’d offered the “lifetime” warranty that they have overseas, they’d have sold a lot more cars plus scored some extra media attention.

    But no, only the minimum 3 years, they couldn’t even be bothered doing 5 years like Renault and Hyundai. I’ve come across so many Hyundai/Kia buyers who said they bought it due to the longer warranty.

  • $29896495

    Doesn’t make sense. They just need one striper model to meet the price point and get people into showrooms. (Which there weren’t enough of, by the way) Then either they sell that car to the economy conscious, or they up sell them to the next model. They all do it. Why couldn’t Opel?

  • MisterZed

    Opel in South Yarra (next to John Blair Honda) are in the middle of constructing a new showroom! Ouch.

    • Anthony Mindel

      This dealership actually belongs to John Blair Honda,one of Hondas worst dealerships in Melbourne

      • MisterZed

        I know it belongs to them – it used to be their used car lot. I just neglected to mention this in my comment. I bought my first Honda from them in 2000, a CR-V, and they didn’t seem bad to me.

        • AUSDAVIDZ

          U mean you dad, u told us your dad purchased and paid for the car while u sat in the car and waited

          • MisterZed

            No you got it wrong. I made him take a cab to the dealer then drive the car home for me.

      • Jakewilliam5

        Let me guess, did you happen to buy your much acclaimed Accord Euro there? Melbornians…

  • Macca

    I think we need to look at the economic climate as well. There is alot of unrest within in the buying market at the moment. People are buying ‘safe’ options. It was a poor time to introduce a ‘new’ brand and hope for it to make profit immediatly. Everyone is hurting, not just Opel, however most of the other brands have history and money to help through the hard times. It also doesn’t help when Aus taxes and duties increase base vehicle price. All in all I agree that Opel should have stuck it out, but we may see it again in the years to come.

  • Pete

    Everyone new their strategy was wrong with price and past reliability skeletons. Yet they went ahead with it, is it ego, arrogance or plain stupidity to not see the bleeding obvisious. Maybe all 3. Geez if i performed that way in my job, well i would not have one.

    • $29896495

      Please outline clearly, what past reliability problems. point by point. Do you make unfounded conclusions in your job?

      • pete

        I owned a 3 yo 02 TS Astra and it’s quantity of repairs were ridiculous. Speaking to other Astra and Vectra owners and the outcomes were very similar. Very shoddy reliability after a few years of ownership. I request you take out your personal slant in your comment.

        • $29896495

          See you haven’t given specifics. I had an 04 SRI. First thing that took me back was fuel starvation turned out to have had nettles from the trees in the dealership grounds stuffed in the tank. Then the radio which didn’t rattle before hand started rattling. Nothing ever went wrong with the car other than things which the dealer touched. So I stopped taking it back. Guess what, the problems stopped. That car was tight as a drum. Had no electrical or mechanical failures from construction. Plenty of issues with Holden service which kept me going back week after week until I decided to put a stop to it.

          So what went wrong, specifically?

        • $29896495

          You bought it second hand or new? What were the faults?

  • crouchy35

    Absolutely correct on the Astra. That was supposed to be the big ticket item! Unfortunately someone put the wrong business case forward and failed to recognize that it held absolutely ZERO premium over the Golf. Therefore it should have been at least competing with the Golf on base price.

    Disappointing really. The OPC’s were an impressive package and will become a rare beast. Other than that, I do feel sorry for the ‘early adopters’ who have to deal with the consequences.

    And we keep being told that GM have turned the corner……………

  • Jacob

    Car dealerships should be factory-owned.

    Starbucks are not franchised.

    • AUSDAVIDZ

      Yes and yesterday Starbucks closed 3/4′s of all its stores here in AUS

      • gusvan@hotmail.com

        Thank God.

  • AUSDAVIDZ

    What a disaster for GM and its dealers, how could they even have got the BASICS wrong?

    • $29896495

      What not enough dealers? Not bringing a base model to sell? Bailing way to soon?

  • dklaw

    They are called vauxhall in Uk and far better superior build quality then the tacky holden cruze, distributor and the Opel would stop being greedy with there pricing ,that would help, just like german imports like ford focus and vw

  • JamesB

    We shouldn’t have to pay premium pricing for cars that were formerly rebadged Holdens. We are now consigned to substandard products from Daewoo. The Barina is now a tacky, inept junk when it used to be a renamed Corsa, and the Astra is now taken over by the rather ordinary Cruze. Don’t even get me started in the midsize section.

  • Opelman

    So many reasons why Opel didn’t survive in the Australian market. Price, marketing, brand awareness, the Australian and world economy. As mentioned in other posts, Australians are not prepared to move away from the norm – Mazda 3, Ford Focus, VW Golf. The way a Golf is marketed as a semi premium offering is laughable, as was the story with Opel. Opel have lovely looking cars, having owned an AH Astra, XC Tigra, and now a Astra J GTC, but they did get it wrong I’m sad to say.

    They should have started with Astra only! The Corsa is 7 years old, should of held off until the new model. The media was ever so keen to tell consumers this, which I think is one of the reasons for poor sales, one of many!

    The Insignianwas always going to be a hard sell. The new Mazda 6 in comparison from where I have been sitting has sold few of this model, how was Insignia supposed to sell.

    At the end of the day, a sad departure of Opel, I quietly hoped they would establish themselves, but never thought they would quit so soon. Should have stuck it out, offered an Astra for $21,000, and tried to up sell to make the extra profit margin. Oh well, too late now.

    • svd

      What about the Immigration department conditions. You come here on a working holiday and you get a work visa for maximum of 12 months then you have to leave the country. Seems they used the wrong form/s when they came here. They may be able to come back as a student – perhaps they can talk to Holden :)

      • Opelman

        Ha ha ha lets hope they get that student visa! Lol :)

    • Sharon

      i Have purchased a 2013 Insignia OPC, i love this car, its got power, style and overall just are so happy with it. I have the 3 year capped warranty and bought the extended warranty all with holden. I am really sorry that they have pulled out of australia, would love to see what the future models are like. Each to their own, but i cannot say anything negative about my opel vehicle.

  • SpikedLemon

    And downright shameful considering GM’s recent history and that GM’s Holden should know what it takes in that market.

  • Junk Mail

    Having worked at a few Dealerships over the past decade and a bit, it still amazes me how Manufacturers look at everything through rose coloured glasses, so few of them will be honest about the fundamental reasons why they cant compete.
    The theory is always, “We will sell ‘X’ amount of these, becasue ‘new model’”. The reality is that there are already established players in the market that cosumers see as good value, they don’t actually need to look at anything else unless it is much better value.

  • Pat

    Opel tried premium marketing in Ireland and some euro countries and through Vauxhall in the UK. Their marketing strategy failed there too. Here, Opel should have made a more aggressive marketing campaign to educate Aussies on their product. By associating themselves with Holden, a “family, non premium” brand, buyers questioned the premium pricing, unaware of the heavy discounting Holden offered on previous rebadged Opels in their effort to bring small to mid sized cars to their range.

    Basically, in other countries, Opel is their Family Holden car company! Aussie buyers obviously did their research before buying an Opel, which is more than can be said for Opel’s.
    I for one am sorry to see them go, as I have owned many!

  • Steve Mid

    Opel did not sell because most people ask their mechanic and friends/family/co-workers etc about the brand. I have never heard a mechanic say a good word about the Opel product. They are very difficult and fiddly to work on with parts that are more expensive and harder to get than BMW or Mercedes parts. For instance it is necessary to remove the front bumper to replace the radiator on a Vectra B. I could go on…

  • Steve Mid

    Opel is a direct competitor to Cherry and Great Wall as a value proposition Based on its reputation as a second hand car you would only purchase these like the Chinese brands as a disposable car with little or no resale value.

    • Bernd

      Sorry, but have you been indulging in a bit of crack? Opel is a direct, and worthy, competitor to VW. That said, VW trounces Opel most of the time but comparing Opel to Chery and Great Wall Is not fair.

  • Jason

    A real shame! The OPC should have done better, it seems like a qaulity car with very nice looks and interior. I’m going to focus my point on OPC as a sporty car option. This is Australia, there is too many brands here and many cheaper price points. With cars like the WRX, 86BRZ, Mazda 3, Focus, Carolla etc etc to choose from, how does Opel expect to sell at higher or equivalent prices of more well known cars? The only reason I’m here commenting is because I was looking at the OPC tonight and considering it an option after drooling over them for the last 3 months. They should have priced them more sensible to start with and created better awareness of them. Opel could have worked here in Aus but time is money and perhaps we really are seeing the end of Greedy Franchise company’s. It was short sighted to think this market would be easy to crack in only 1 year, i feel very sorry for what has happened to the Franchise owners, this should serve as a real lesson to anyone who ever wants to join a franchise of anything. I hope they can at least break even.