Those troubled by General Motors’ seeming lack of strategy when it comes to the Opel and Chevrolet brands in Europe need not worry: earlier this week, the automaker reiterated plans to position Opel as a more expensive offering on the continent. The move is expected to give both brands room to be sold side-by-side in the same market, positioning Chevy as the mainstream value brand, and Opel as a more upmarket offering that commands higher prices.
Chevrolet global chief Alan Batey confirmed the strategy going forward, adding that the goal was to build on the strong initial demand for the subcompact Mokka crossover and Adam mini car. The successful repositioning of both brands would not only increase margins and, therefore, profitability at Opel, but it would also create more room for Chevrolet to operate in a region where its sales have traditionally been very low.
“We need to rebuild the (Opel) brand,” Batey said during a conference call on Tuesday following a question from an analyst about how GM planned to differentiate between Opel and Chevrolet in Europe. “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.
General Motors has been positioning Chevrolet as the global mainstream brand that’s present in every market around the world, right alongside Cadillac as the luxury contender. Similar to Buick in the United States and China, Opel (or Vauxhall, as it’s called in the U.K.) is meant to be a successful regional brand.
Having been appointed the head of global Chevrolet last month, Batey called Opel the mainstream brand in Europe, and Chevy the value play.
“We try and make sure we have as little overlap as possible,” he said, adding that there was more to come on the subject.
Opel’s market share in the European Union was at 6.8 percent in the first five months of 2013, roughly the same as that in 2012. By contrast, Chevrolet’s market share dropped by four-tenths of a point to 1.1 percent in the first five months of 2013, even after new car sales in Europe hit a 20-year low in 2012.
European Opel and Chevrolet dealers have become frustrated with the seemingly identical market positioning of both brands, and have called upon GM to establish a clear-cut differentiation. Some have called upon GM to position Chevrolet and Opel as analogues to VW’s Skoda value brand and Volkswagen premium brand.
Currently, most Chevrolet and Opel vehicles in Europe share vehicle architectures and compete in the same markets — with Chevys being more expensive than Opels in some cases.