Opel's Branding Yo-yo: Down, Up, Down, Down, Up

GM wants to move Opel upmarket (again,) to allow more breathing space for Chevrolet in Europe, Reuters reports. Frustrated Opel dealers say GM needs to declare what it wants, and stick with it for a change.

“We need to rebuild the Opel brand,” Chevrolet Chief Alan Batey told Reuters. “As we do that, that gives us the opportunity to move Opel and Vauxhall up a little bit, which creates potentially a value opportunity for Chevy. We try and make sure we have as little overlap as possible.”

Chevrolet failed to carve out a meaningful market share in Europe, and recently lost a lot of the little it had gained. January through May, Chevrolet’s European sales were down 31.5 percent. Opel’s EU sales were down 6.4 percent in the same period. Sales of Chevrolet and Opel are not down due to cannibalization. They are down in a murderous European market, where established brands fight for survival, and where new brands are trampled in the wild stampede.

Moving a brand up-market is an arduous exercise. It takes iron discipline, a lot of time, and even more money. Opel has none of them. 40 years ago, Audi’s image was worse than that of Opel – but GM can’t wait 40 years to take Opel around. The direction of Opel’s branding usually changes with the CEO, and CEOs change around once a year at Op0el, recently more often than that.

In 2010, Nick Riley, Opel’s CEO at the time, wanted to move Opel upmarket. Reilly’s successor, Karl-Friedrich Stracke, said Opel moved the brand up market too fast and lost some of its more cost-conscious customers. Short term interim-chief Steve Girsky wanted to go up again: “Think of a Volkswagen-Skoda kind of thing. Opel will be higher-priced, more features and Chevy will be lower-priced,” he told Reuters.

The only sensible voices in this directionless drama are the Opel dealers. Says Reuters: “Opel dealers have voiced frustration with the brand’s market positioning, saying GM needs to clearly define whether or not it is a more premium brand. Some have suggested GM should orient Opel to compete with VW’s Skoda.”