If you've taken even a cursory look at GM's European strategy and wondered how it can target the market there with both Chevrolet and Opel/Vauxhall, you're not alone. In fact General Motors itself has found it difficult to justify the two-pronged approach. That's why it's essentially pulling Chevy from the European marketplace.

Instead of trying to ply European buyers with what are mostly former Daewoo products rebadged as Chevys, GM will now let Opel (or Vauxhall in the UK) represent its mass-market aspirations. Chevrolet will keep its presence in Russia and other former Soviet markets, and will continue selling certain niche products in Eastern and Western Europe. The Corvette, for example, has long been sold in Europe through Cadillac dealerships, which for its part is currently "finalizing plans for expanding in the European market".

While the shift in strategy is expected to help GM get a stronger foothold in the European market in the long run, in the short term the restructuring will cost it dearly: between $700 million and $1 billion, according to its own estimates, split between the last quarter of this year and the first half of the next. Jump into the full press release below for more.
Show full PR text
GM Strengthens its European Brand Strategy
2013-12-05

- Opel/Vauxhall to compete as GM's mainstream brands across Europe
- Chevrolet to focus on iconic products in Europe
- Cadillac to expand in Europe

DETROIT – General Motors today announced plans to accelerate its progress in Europe by bolstering its brands in the mainstream and premium segments.

Beginning in 2016, GM will compete in Europe's volume markets under its respected Opel and Vauxhall brands. The company's Chevrolet brand will no longer have a mainstream presence in Western and Eastern Europe, largely due to a challenging business model and the difficult economic situation in Europe.

Chevrolet, the fourth-largest global automotive brand, will instead tailor its presence to offering select iconic vehicles – such as the Corvette – in Western and Eastern Europe, and will continue to have a broad presence in Russia and the Commonwealth of Independent States.

This will improve the Opel and Vauxhall brands and reduce the market complexity associated with having Opel and Chevrolet in Western and Eastern Europe. In Russia and the CIS, the brands are clearly defined and distinguished and, as a result, are more competitive within their respective segments.

Cadillac, which is finalizing plans for expanding in the European market, will enhance and expand its distribution network over the next three years as it prepares for numerous product introductions.

"Europe is a key region for GM that will benefit from a stronger Opel and Vauxhall and further emphasis on Cadillac," said GM Chairman and CEO Dan Akerson. "For Chevrolet, it will allow us to focus our investments where the opportunity for growth is greatest."

"This is a win for all four brands. It's especially positive for car buyers throughout Europe, who will be able to purchase vehicles from well-defined, vibrant GM brands," Akerson said.

Chevrolet will work closely with its dealer network in Western and Eastern Europe to define future steps while ensuring it can honor obligations to existing customers in the coming years.

"Our customers can rest assured that we will continue to provide warranty, parts and services for their Chevrolet vehicles, and for vehicles purchased between now and the end of 2015," said Thomas Sedran, president and managing director of Chevrolet Europe. "We want to thank our customers and dealers for their loyalty to the Chevrolet brand here in Europe."

The majority of the Chevrolet portfolio sold in Western and Eastern Europe is produced in South Korea. As a result, GM will increase its focus on driving profitability, managing costs and maximizing sales opportunities in its Korean operations as the company looks for new ways to improve business results in the fast-changing and highly competitive global business environment.

"We will continue to become more competitive in Korea," said GM Korea President and CEO Sergio Rocha. "In doing so, we will position ourselves for long-term competitiveness and sustainability in the best interests of our employees, customers and stakeholders, while remaining a significant contributor to GM's global business."

With the decision that Chevrolet will no longer have a mainstream presence in Western and Eastern Europe, GM expects to record net special charges of $700 million to $1 billion primarily in the fourth quarter of 2013 and continuing through the first half of 2014. The special charges include asset impairments, dealer restructuring, sales incentives and severance-related costs, and will pave the way for continued improvement in GM's European operations through the further strengthening of the Opel and Vauxhall brands. Approximately $300 million of the net special charges will be non-cash expenses. In addition, GM expects to incur restructuring costs related to these actions that will not be treated as special charges, but will impact GM International Operations earnings in 2014.

About General Motors Co.
General Motors Co. (NYSE:GM, TSX: GMM) and its partners produce vehicles in 30 countries, and the company has leadership positions in the world's largest and fastest-growing automotive markets. GM, its subsidiaries and joint venture entities sell vehicles under the Chevrolet, Cadillac, Baojun, Buick, GMC, Holden, Isuzu, Jiefang, Opel, Vauxhall and Wuling brands. More information on the company and its subsidiaries, including OnStar, a global leader in vehicle safety, security and information services, can be found at http://www.gm.com.


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  • 49 Comments
      • 1 Year Ago
      [blocked]
      mapoftazifosho
      • 1 Year Ago
      Took long enough...good grief.
      Pat
      • 1 Year Ago
      I wonder if this means that we will start to see Chevy products showing up with an Opel badge (and vice versa)?
        The Wasp
        • 1 Year Ago
        @Pat
        I think it means that when GM Korea develops a decent car (like they already have), Opel and Vauxhall will have no choice but to slap their badge on it. This could be a way for GM to keep the Opel and/or Vauxhall names alive and remove the artificial barrier between "Chevrolet cars" and "Opel cars" in Europe.
      bootsnchaps60
      • 1 Year Ago
      I would love to see a diagram of what GM sells worldwide and where models overlap and replicate.
        Pete
        • 1 Year Ago
        @bootsnchaps60
        Yes, then we all could help GM come up with a strategy. I'm willing to bet that it is a horrible patchwork. I hope the new CEO can read some of these comments. It would be so valuable to hear from consumers in the UK, Europe, Africa, South America, and Asia.
      Pete
      • 1 Year Ago
      This may be some of GM's biggest news. It also highlights a very muddled and still Americentric approach to running this company. The idea of selling the Cruze in a market that has an equivalent or possibly better Opel product is such a waste of valuable resources. It was counterintuitive, especially during some of GM's most fragile days of existence. It is time ONCE AND FOR ALL for this company to eliminate more brands and truly have a global strategy. You may all laugh at me but I would first eliminate the VAUXHALL brand. I would then eliminate the HOLDEN brand. Here is the one that people will say I'm crazy- eliminate BUICK. Yes it is a strong brand in China but that alone should not guide a global company. Buick is a brand with very little identity. I think it is a brand that is too weak to shed its frumpy, middle-aged boring, surburban, whatever you want to call it image. I would then eliminate GMC. Now that is one weird brand. That one will never go global and its identity as somehow a more professional-grade Chevrolet run it's course. GM will have to purchase a truck manufacturer to actually get back in that game. They need to look at VWs strategy for that (Man Diesel and Scania) Daewoo would then be eliminated. What does this leave? It leaves the company with brands that will be built strong across may regions- Chevrolet/Opel/Cadillac/Commercial Truck/Bus Division. I believe Opel is much to valuable a brand to ever eliminate. Chevrolet is the heart of the company. Cadillac is gaining recognition/respect in tough markets like Europe. Let a strong acquired brand handle the global truck/bus market. Maybe Paccar could be taken over when the General gets strong again. Peterbilt would be the brand to go global.
      ERNSTEVERYTHING
      • 1 Year Ago
      well its not rocket science.. anyone with an ounce of common sense could have predicted this.. Since Europe views Chevy as a complete joke. Apart from the midlife crisis 50 yr old that might buy a Corvette, there is no decent offering in the Chevy line up that would interest a european buyer.. ! Its a completely different market with a completely different aesthetic.... marketing clowns, in dockers and polo shirts..
      throwback
      • 1 Year Ago
      Never made sense to me to take Chevy to Europe when you had Opel competing for the same buyers. But that is typical GM, always competing against themselves.
        May
        • 1 Year Ago
        @throwback
        There's no competition between Chevy and Opel in Europe, they offer different cars for different customers.
      mbukukanyau
      • 1 Year Ago
      Former Daewoo products? Does this rag consider itself serious?
      gary
      • 1 Year Ago
      GM should have offloaded Opel/Vauxhall to Magna when they had the chance.
      DAC1991
      • 1 Year Ago
      Finally. Chevrolet's brand equity in Europe is 0.0. If you want a cheap Korean car, you buy a Hyundai or a Kia. Not a Chevrolet. It is also good news for Opel/Vauxhall. They can use all resources from GM it can get. Sorry chevy, good luck elsewhere buy you won't be missed here!
      gtv4rudy
      • 1 Year Ago
      GM was never that serious in the European car market from the start. The only offerings were a few crappy B class cars and the Cruse.
      aatbloke1967
      • 1 Year Ago
      This comes as no surprise really as over the years, Chevrolet has backed itself into a corner in Europe. The first nail in the coffin was to rebrand the existing Daewoo models as Chevrolets in 2005. At the time, these were all truly bargain basement models and priced accordingly. But over the years the products rapidly improved, with the Matiz/Spark replaced with the M00 Spark, the Kalos/Aveo replaced with the T300 Aveo (Sonic in the US) and the Nubira/Lacetti replaced with the Cruze. Not only were these products superior, they were almost as good as Opel's mainstream models, shared the same platforms - GM announced some years ago Korea would engineer Gamma, and Germany Delta & Epsilon - but the model ranges were expanded and Opel even began selling Korean engineered models such as the Mokka which differed only in styling from the Trax. Selling the Volt alongside the Ampera made the two marques increasingly difficult to differentiate. VAG have managed to successfully sell differing marques utilising the same platform at different buyers, but GM's Chevrolet soon no longer remain the bargain basement pricing arena it once was. Had it simply stuck with the Spark, Aveo and Cruze in lower spec, lower priced trims I think Chevrolet would have captured more of a niche, and could have established itself as GM's Dacia. But integrating the Camaro and Corvette under the Sam showroom roof made that philosophy impossible to achieve. Worst of all, the initial philosophy of branding Chevrolet as a cheap Korean car with an American badge became entrenched in the minds of a European buyers who scoffed at pricing comparable with mainstream Opels and belied the quality the product had become. Ultimately GM needed to run with Chevrolet remaining a cheap runabout, or a more desirable marque specialist in the storied Corvette and Camaro models. There was no room inbetween, but this was a demise which had been self-inflicted.
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