MONTE CARLO, Monaco – General Motors is determined to turn its loss making Opel-Vauxhall European operation into a profit-maker and has no intention of pulling out.
GM Europe President and Opel board chairman Karl-Friedrich Stracke was responding to a report by Automotive News Europe that Ford Europe and GM Europe might respond to mounting losses by pulling out of a market, which it described as once being low growth/low (profit) margin and is now no growth/no profit.
Ford Europe has been profitable for six of the last eight years. But GM Europe hasn’t made a profit this century. The current euro financial crisis has seen consumer confidence evaporate and undermined West Europe’s car sales, which look like falling for the fifth year in a row.
GM Europe is planning a restructuring programme and plans to announce more details at the end of this month.
In a speech to the Automotive News Europe annual conference, Stracke said Opel has been in operation for 150 years.
“We are going to stay,” he said in his speech.
Opel-Vauxhall would maintain its investment in new products, which were the key to success.
GM subsidiary Chevrolet is also in the European market, and a questioner after the speech asked if it was taking sales away from Opel-Vauxhall. Stracke said Opel-Vauxhall operated in segments above Chevrolet and has prices five to 10 per cent higher.
When will Opel-Vauxhall be profitable?
“As soon as possible, but its is difficult to forecast in current conditions. We are leaving no stone unturned,” Stracke said.
Neil Winton – July 1, 2012