Barra's GM Holding Firm On Plans To Revive Opel Profits

In the EU27, Opel/Vauxhall ranked third place for market share in 2013 (6.8%), behind VW (12.5%) and Ford (7.4%). Market share was flat year-on-year, which means that sales fell during the year (down 1.4%.) I would presume that a lot of the sales are going to discount fleet, such as rental. The lack of desirable luxury cars makes Opel uncompetitive in the German company car market, which is a real weakness.

@Pch101 One should never presume. Historically, my observation has been that market share in the EU is more volatile than in the US, with more consumers than in the US preferring the newest models, rather than sticking with a favourite brand. In the UK companies I've worked with, those who get company cars are especially keen to have the "latest and greatest", rather than a particular badge. Opel's product line, as the article notes, is older than its competition. This, more than the lack of a luxury product, is likely the major drag on sales. Certainly, the lack of a luxury line hasn't hurt Ford. Luxury is a small part of the market, as anyone who's been to Europe can see.

@ect Germany is the largest car market in Europe. Last year, 24% of EU27 new registrations were in Germany. In Germany, companies tend to have one fleet relationship. So if the head guy wants a Bentley, that means that the underlings are going to be driving Audis and Volkswagens, given the relationship with VAG. Neither Ford nor GM have anything to offer those executives. That's a serious liability in a country such as Germany, and you can't sell in Europe while ignoring what the Germans want.

@Pch101 Ford has the Fusion Ghia. No, Titanium. No, Mondeo Vignale . http://www.dailyfinance.com/2013/09/07/would-you-buy-this-fancy-ford-fusion/

@Pch101 Do you make this stuff up as you go? I've done business across Europe (as part of around the world) for over 30 years. So long that I can remember West Germany, before the Wall came down. It is nonsense to say that fleet buyers have single-company relationships. Just as it's nonsense to say that private companies sell for public-company multiples. In Germany, the head guy and the executives drive Mercedes or BMW. Larger Audis are not very popular (Germany is not China). Bentley isn't an executive car at all. But the managers, salespeople, service reps and others who drive company cars sure don't get Mercedes or BMWs to drive. They get VWs, Fords and Opels. It is axiomatic that, in the car biz as in other markets, customers prefer new models to older models. When the financial crisis hit in 2008, most car makers pushed back new model development, to save money. As Bertel repeatedly told us, VW decided to maintain their development program. Which I thought at the time was a rare example of real long-term planning. The result? During the 2010-2013 period, VW introduced a number of new models, much more than their competitors. As a result, VW has gained market share and the others have lost it. Ford had a few new models, which have apparently done well, and therefore haven't suffered a major decline - though they have had a decline. Opel/Vauxhall have soldiered on with an aging product line, and their sales/market share results reflect that. The uncertainty about the future of Vauxhall/Opel has undoubtedly also had an impact. Will GM's new investment in the brand bear fruit? As the Zen master famously said, "we'll see". Pch, I think you're a smart guy overall, but I often get the sense that your knowledge is "book larnin", as they say.

@Pch101 "In Germany, the head guy and the executives drive Mercedes or BMW. Larger Audis are not very popular (Germany is not China)." You should probably inform the Germans of this fact, as Audi is outselling BMW in Germany. Then again, Ford would probably be happy to know the lack of luxury cars hasn't done it any harm, while it reports a $1.6 billion loss in Europe for the year. I'm a bit surprised that your experience didn't teach you anything about the importance of margin, but I'm just a finance guy who apparently reads books on occasion.

@Pch101 When I walk the streets of north European cities (German and others), the Audi I most often see is the A3. Not an executive car. In southern Europe (by observation), far the most popular Audis are the A1 and A2. But that's apocryphal. According to best-selling-cars.com, Mercedes substantially outsells Audi in Germany, year after year. Audi did, as you say, outsell BMW in 2013, but not in 2012. Audi's 2013 sales rose on the strength of the A3 (about 1/4 of Audi's total German sales). The 3-series (the lowest level of executive car) far outsells the A4. The C-Class also outsells the A4. Moving up the food chain, both the 5-series and the E-Class outsell the A6. One may infer from the "best-seller" data and total brand sales that the S-Class owns the top tier. Which is consistent with my personal observation - I can't recall ever seeing an A8 in Europe. If German companies did have single-supplier fleet relationships, neither Mercedes nor BMW could achieve the volumes they do with their "executive class" offerings. And neither could Ford or Opel with their "for the masses" offerings that lower levels get.

@Pch101 So you want to elevate your anecdotal observations above my data? Now I can see why this is going so well. The majority of luxury cars delivered in Germany are company cars. The automakers are also in the leasing business, and leasing companies specialize in managing one offering, i.e. Alphabet offers BMWs and MINIs, as it is owned by BMW. There is no luxury car market in Germany without leasing, and the type of car available is part of the compensation package. There isn't just a free choice of vehicles for most executives; their choices are tied to the fleet service that the employer provides. Meanwhile, it's not exactly a secret that GM's fleet business in Europe is disproportionately going to rental. Even the head of Vauxhall admits to this. In many ways, GM's problems in Europe aren't much different from what they traditionally have been in the US, except GM can't use full-size trucks to fix the Opel business.

@Pch101 "So you want to elevate your anecdotal observations above my data? Now I can see why this is going so well." You offered no data. I offered anecdotal observations for what it is (this is called being conversational), followed by hard data from a referenced source. Which confirms my observations. "The majority of luxury cars delivered in Germany are company cars." This is true. And the sales data show that the S-Class and 7-series each outsell the A8, while the E-Class and 5-series each outsell the A6. Which is important because most company cars are definitely NOT executive cars. They're the cars driven by salespeople, service reps, etc. Cars that neither Mercedes nor BMW can supply. Cars supplied by the likes Ford, Opel, VW. "The automakers are also in the leasing business" Of course they are. But most leasing companies, and far away most of the leasing business, is done by leasing companies owned by banks and other financial services companies. These companies will finance vehicles from any manufacturer, and this flexibility is the basis of their sales approach. "The lack of desirable luxury cars makes Opel uncompetitive in the German company car market". "In Germany, companies tend to have one fleet relationship. So if the head guy wants a Bentley, that means that the underlings are going to be driving Audis and Volkswagens, given the relationship with VAG." These statements are simply not true. Which is where we started. Your increasingly strident efforts to deny this mistake are becoming more and more ridiculous. I have seen that, like Big Al, you have some compulsive need to get in the last word, as if that denotes some sort of triumph. So, go ahead. But as far as I am concerned, this conversation is over.

Tax regime is it. Some can take the higher co2 and he others can't. The ordering process allows this and it isn't an effect.