“Should Opel, Chevy coexist in Europe?” This is what Automotive News [sub] asks today without offering a real answer. Let’s have a look. Then, cast your vote.
As we could see in our review of six month European numbers, Chevrolet is GM’s only bright spot in Europe. Chevy’s EU sales rose 14 percent in the first six months while Opel’s EU sales dropped 15 percent in the first half of 2012. Of course, 15 percent more than the 90,000 units Chevy had sold in the same period of 2011 does not quite make up for losing 15 percent of 538,000, but let’s not get hung up on details.
Indeed, it looks like there is a plan in Detroit that calls for the elimination of GM’s regional brands. Such as there are Opel, its UK alter-ego Vauxhall, and, while we are at it, Holden in Australia.
The test market for this was the De-Daewooification of South Korea. Where, not quite coincidentally, most of the Chevrolets come from that are so successful in Europe.
I can very well imagine that there are people at the RenCen who said more than once: “How come we need to close down perfectly good brands, and those clowns in Germany can keep on losing money year after year after year without being put up against the wall?”
Regional brands are a threat to central power. As long as regional brands do well, they are tolerated. If they don’t do well, especially if they are a big drag on the stock price at home, their life is in danger.
The longer the red ink is flowing at Opel – and there doesn’t seem to be an end in sight for the bloodletting, not for five years at least, a terrifying thought for a company with a quarter-to-quarter time horizon – the bigger the likelihood that someone says: Let’s stick a sock into Opel. Do not resuscitate. Do not assist eating and drinking.
Possibly, someone already said that. Brand strategies don’t become evident overnight. At Volkswagen, changes of that magnitude took ten years or more for outsiders to notice. Volkswagen’s upmarket move, which Stracke unsuccessfully wanted to counter, was decided by Piech after he took the helm of Volkswagen in the early 90s. Heck, even the inside did not really get Piech until he insisted on the Phaeton.
Automotive News not very helpfully suggests that the time of GM executives should be “spent deciding if they need two very similar brands in Europe and, if not, which is the keeper.“
How would you decide?