GM has blamed Western Europe location for Opel’s woes, unions, the economy. Opel has a brand crisis, and the crisis is “a self inflicted-wound,” says Christiaan Hetzner, Reuters’ man in Frankfurt, Germany, in an article on why Opel is in so much trouble. “Reputation is seen as the problem, not cars.” The recent attempts to move the Opel brand up-market ripped those old wounds open and could kill the patient.
In January 2010, then-Opel CEO Nick Reilly announced a plan to move the brand up-market, and to position it as the “leading European manufacturer of high quality, desirable automotive products, based on German Engineering.”
It was a belated move. In the 90s, Volkswagen began to move its brand upwards in a strategy called “Höherpositionierung”(up-positioning.) The Phaeton was the banner bearer of that strategy, and success was mixed. When Reilly announced his “Höherpositionierung,” Volkswagen already retreated from theirs. The new Jetta, the US-Passat, the UP! series are examples of this re-orientation.
Opel never had much of an image, but lived well with it. 40 years ago, Opel was the market leader in Germany and sold more cars than Volkswagen. Today, Opel’s market share has dropped below 8 percent. Its own dealers don’t understand the brand anymore:
“What kind of brand is Opel, and what customer group are we trying to address?” asked Jaap Timmer, European Opel dealers’ president and a supervisory board member ahead of a key meeting last Thursday. “First it’s supposed to be premium, then it’s not premium – we need a clear strategy.”
According to the article, GM global marketing chief Joel Ewanick wanted to move Opel upmarket and out of the way of Chevrolet, which Ewanick positions as a value brand. That premium image did fit Opel like a rented tuxedo on a redneck. Says the Reuters article:
“Former Opel labor leader Klaus Franz was critical of Ewanick’s plans at the time. He feared the brand would lose its existing more price-conscious customer base. Going upscale was the “Saab-isation” of Opel, Franz declared, in reference to GM’s Swedish premium marque, which died a slow death.”
Doubts about Opel’s future make customers shun the brand even more. “Someone who is uncertain about the future of a brand won’t buy a car from that company,” says Ferdinand Dudenhoeffer, head of the Center Automotive Research (CAR) in Duisburg. “GM and Opel have themselves to blame.”
Brands can be turned around, but it needs time and dedication. 40 years ago, when blue collar Opel ruled the roost, Audi was nowhere as a brand. Today, it is a brand envied by car companies around the world.