It’s not secret to GM Authority readers that Opel has had issues. We’ve documented the changes that have been implemented over the past few years, such as the impending closing of the Bochum plant. Now that that the company is leaner and better poised for action, we’re learning more how Opel plans to return to profitability.
According to Automotive News, Opel plans for profitability include increasing its European market share via focusing on smaller cars and by using more components from its parent, General Motors. “To be really profitable you need to use a global platform,” says CEO Karl-Thomas Neumann, explaining that this was Opel’s way of achieving economies of scale in the global environment. Opel in the past has been between a rock and a hard place due to “GM’s desire for global economies of scale, and Opel’s demands to cater for the local market,” among other issues.
Opel’s current market share in Europe is 5.8 percent but has the goal of reaching 8 percent (including UK cousin Vauxhall) by 2022. To achieve this, Opel plans on launching 27 new models and 17 new engines between now and 2018, much of it by making greater use of the technologies General Motors has to offer.
In April 2013, General Motors renewed a commitment to Opel by pledging to invest $5.2 billion by the end of 2016 to support new models. This can be seen by recent shared development costs between Opel and Buick. “The next generation Corsa will have a General Motors platform,” Neumann said, which is a change from past production that relied on joint ventures to develop vehicles—for example, the present Corsa was developed with Fiat.
Since then, losses have also been cut in half. Adds Neumann, “I have a lot of confidence about achieving our interim goal [of achieving profitability by 2016] … For the company as a whole it is an opportunity to implement deep seated change. Currently the structures are being adapted to ensure that people can’t take short-cuts in the future.”