General Motors has restructured its loss-making operations in Europe by creating a new organisation called the Opel Group, which takes over full economic responsibility not just for Opel/Vauxhall products but all of GM’s operations in Europe and Russia.
To be based in Rüsselsheim, Germany, the Opel Group will operate as an umbrella for the Opel and Vauxhall brands, as well as GM in Russia. GM recently axed Chevrolet from Europe — another piece of the puzzle in its de-fragmentation of that area of the globe.
GM said allowing the Opel Group to take over economic responsibility for Europe meant the company “will be able to strengthen its financial basis”, presumably capitalising on profitable ventures that previously fell outside of Adam Opel AG’s brief.
By 2022, GM wants to own 8 per cent market share in Europe and grow its profit margin to 5 per cent while improving vehicle quality and employee satisfaction. This is part of a business plan called DRIVE2022.
This bold turnaround comes after Adam Opel AG flirted with bankruptcy post GFC, with GM sinking upwards of 4 billion euros into the company in April last year to take it through 2016. One fruit of this investment has been a new engine family rolling into various models now.
Opel AG last month laid out its European growth plans that it said would return it to profit by the middle of the decade while launching 27 new models and 17 engines by 2018.
Key to cutting costs while improving quality is to grow its production, thereby giving it better economy of scale. The planned manufacture of extra cars for Buick in the US and Holden in Australia (from 2015) will improve its production levels in just this way, especially considering its imminent withdrawal from China.
So far GM has confirmed only the high-end hot Astra VXR, plus the Cascada convertible and Insignia VXR for Australia from early next year, though it is understood regular versions of the Astra will also return here when that model launches in next-generation guise.
Holden also has carte blanche to cherry pick the best models for Australia from anywhere in the GM catalogue provided they are economically viable as it pursues its own goal to return to the top of Australia’s sales charts by 2020.
Does this mean even more Opel-made Holdens for Australia? It is unclear, though it would be remiss to rule it out. The new Corsa (pictured above in red), for instance, was revealed last week, and that car was once upon a time sold as the Barina.
“The new Opel Group is a testimony of how important Opel has become for General Motors,” the company said in a statement this week.
The Opel Group will be headed up by current Adam Opel AG CEO Karl-Thomas Neumann, who said the changes were a sign of the confidence GM had in its European brand to run the whole show on the continent.
“Today, we are more than just Opel/Vauxhall. With the Opel Group, we align our organisational and legal entity structure in Europe with the business operations. We streamline our decision making processes and increase our efficiency,” he said
“In brief: this reorganisation is an important step in implementing our business plan DRIVE! 2022 and another sign of confidence of our parent company GM.”
Various reports this week point to Opel looking at expanding into the budget end of the market with a Dacia rival, and slimming back its premium range by axing the Ampera (sold in Australia as the Holden Volt).