GM confirmed its decision to axe Chevrolet as a mainstream brand in Western and Eastern Europe was largely due to the region's difficult economic situation and the consequent challenging business model.
GM says Chevrolet – the fourth-largest automotive brand in the world – will continue to have a strong presence in Russia (where it is the country’s fifth-highest seller) and the other eight nations of the Commonwealth of Independent States, which includes Armenia, Belarus, Kazakhstan and Moldova, among others.
The car maker says it will tailor its presence in Western and Eastern Europe by offering select iconic vehicles, like the Chevrolet Corvette.
From 2016, Opel and Vauxhall will compete as GM’s core volume brands throughout Europe, with Cadillac to sit above as a premium offering. GM says Cadillac will enhance and expand its distribution network over the next three years as it prepares for a number of new product launches.
GM chairman and CEO Dan Akerson says the European restructuring will improve the Opel and Vauxhall brands and reduce the complexity associated with having Opel and Chevrolet competing in the same markets in Europe.
“Europe is a key region for GM that will benefit from a stronger Opel and Vauxhall and further emphasis on Cadillac,” Akerson said.
“For Chevrolet, it will allow us to focus our investments where the opportunity for growth is greatest.”
“This is a win for all four brands. It’s especially positive for car buyers throughout Europe, who will be able to purchase vehicles from well-defined, vibrant GM brands.”
The announcement comes just four months after Opel announced its exit from Australia, where it similarly competed with fellow GM sister brand Holden in the same sector of the market.
Automotive News reports Chevrolet sales have averaged about 200,000 units in Western and Eastern Europe since being relaunched in the region in 2005.
Its sales in European Union and European Free Trade Association countries have fallen 17 per cent so far this year, giving it just a 1.2 per cent share of the market. Opel and Vauxhall have a combined 6.7 per cent share of the same markets.
Approximately 90 per cent of the Chevrolet-badged vehicles sold in Europe are produced in South Korea, with those markets accounting for roughly 20 per cent of GM Korea’s total production.
GM Korea president and CEO Sergio Rocha says his division will not suffer as a result of the restructuring.
“We will position ourselves for long-term competitiveness and sustainability in the best interests of our employees, customers and stakeholders, while remaining a significant contributor to GM’s global business,” Rocha said.
Chevrolet Europe president and managing director Thomas Sedran said the brand would work closely with its dealer network in Western and Eastern Europe to ensure it honoured its obligations to existing customers in coming years.
“Our customers can rest assured that we will continue to provide warranty, parts and services for their Chevrolet vehicles, and for vehicles purchased between now and the end of 2015,” Sedran said.
“We want to thank our customers and dealers for their loyalty to the Chevrolet brand here in Europe.”
GM also plans to work with Chevrolet dealers individually to determine their futures. Chevrolet’s European network includes about 1900 dealerships, of which more than half also sell Opel vehicles.