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Opinion Desk: What’s GM’s End-Goal With Chevrolet and Opel In Europe?

As General Motors solidifies its commitment to Opel in Europe, Australia, China (sort of) and certain South American markets, we begin to wonder what the automaker’s long-term strategy is in having both Chevrolet (or Holden — its equivalent in Australia) and Opel/Vauxhall in the same markets, fighting for what are most likely the same type of customer.

The original idea behind having the two mainstream brands in the same markets seemed to revolve around moving Opel upmarket, thereby allowing Chevy to be the full-line mainstream automaker. But as the following comparison of Opel and Chevrolet vehicles in Germany (the test market we selected for this comparison) reveals, the two brands’ pricing is currently very similar.

Base Prices Of Competing Chevrolet & Opel Vehicles In Germany (In Euros)
SEGMENT OPEL OPEL PRICE € CHEVROLET CHEVY PRICE € COST ADVANTAGE
SUBCOMPACT HATCH CORSA 12,630 AVEO 10,990 CHEVY
COMPACT SEDAN ASTRA 18,270 CRUZE 19,790 OPEL
COMPACT HATCH ASTRA 14,990 CRUZE 14,990 EQUAL
COMPACT WAGON ASTRA 16,990 CRUZE 15,990 CHEVY
MIDSIZE SEDAN INSIGNIA 24,745 MALIBU 29,990 OPEL
SUBCOMPACT CUV MOKKA 18,990 TRAX 16,990 CHEVY
PLUG-IN HYBRID AMPERA 45,900 VOLT 42,950 CHEVY

Notice that of the seven segments seen here:

  • Chevrolet is the lower-priced alternative in four segments (subcompact hatch, compact wagon, subcompact CUV, plugin hybrid)
  • Opel is the lower-priced alternative in two segment (compact sedan, midsize sedan)
  • Chevrolet and Opel are tied in one segment (compact hatch)

For reference, a base BMW 3 Series is €28,500, and a base BMW 1 Series is €21,900 in Germany.

As the comparison demonstrates, Chevrolet and Opel offerings are very similar in price in the most popular vehicle segments — indicating a possible dilemma for GM as it develops Chevy in Europe while making Opel available internationally. As it stands, the former has very low sales figures in Europe, while the latter is just getting its feet wet in Australia and South America. But the situation might not be as unfavorable as it may initially seem, since at least one other competitor is facing a similar situation. That competitor is Hyundai.

The Korean automaker is facing a similar state of affairs on a global scale with its Hyundai and Kia brands: both offer similar vehicles in the same segments that are comparably priced. In that regard, the Korean automaker is relying on substantial brand- and vehicle-based differentiation to market its vehicles — a strategy that appears to be working on a global scale. Perhaps GM can turn the existence of both Chevrolet and Opel in the same markets into a competitive advantage, but we wonder if that is really enough to set the German and American automotive brands apart in a slumping yet highly-competitive market.

If that’s indeed the strategy that GM is intent on pursuing, then the whole effort is reminiscent of the automaker’s practice of offering the mainstream-oriented Chevrolet, Pontiac, and Saturn brands in the U.S. — and we all know how that turned out. If anything, the practice of having multiple mainstream brands taught us that offering unique vehicles that can fend for themselves in the marketplace is key. So maybe moving Opel (and Vauxhall) upmarket while growing Chevrolet in Europe isn’t such a bad idea after all.

It will be interesting to see if The General will be able to turn the existence of both Chevy and Opel in the same markets into a competitive advantage.

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Comments

  1. The biggest problem with these two is not GM’s Chevy, Oldsmobile, Pontiac, and Saturn past, it is with selling the both of these offerings under the same roof. They need to move Chevy out of Opel dealerships and then they can each grow on their own.

    As for the problems with Chevy, Pontiac, and Saturn, their failures were because of the Japanese yen and not each other. There was a time in the early 80’s when the first 3 looked very similar, but for most of the time they were all very unique. Saturn on the other hand had their own vehicles for most of the time and then had a few Opels and in a last gasp of desperation of a GMC (Outlook). Oldmobile became Hondas and Toyodas and Pontiacs became Nissans. These brands died in the early 90s as the low yen created an insurmountable competitive advantage for the three Japanese automakers. GM’s offererings back then were fairly good and differentiated.

    Reply
    1. I’m just glad we’ve moved away from the ridiculousness of the “One Version for Each Brand” era. Remember the Chevy TrailBlazer, GMC Yukon, Oldsmobile Bravada, Buick Rainier, Saab 9-7X and Isuzu Ascender, all of which were on the same platform? There are still a few too many vehicles in the GM stable (the Traverse and HD Silverados could disappear, leaving only their GMC counterparts), but they seem to have stopped the whole rebadging thing, with each of the four American brands having different personalities and mostly catering to different buyers.

      Reply
      1. My thumbs down is for your comment about cutting Chevy models. If anything gets cut in the GM stable it should be GMC itself.

        Reply
  2. It seems like it was a poor idea to market the Malibu in Europe. It isn’t well-suited to their market, and I feel like compromises in the global design make it less-suitable for *our* market than it would otherwise be. It also appears to be overpriced, and I’m sure most people would rather have the base 3-Series sedan.

    Reply
    1. Well, the Malibu is just as well-suited for Europe as the Insignia, although I believe its price is a result of Chevy’s unwillingness to chase rock-bottom pricing in an upset economic climate:
      http://gmauthority.com/blog/2013/05/heres-how-gm-plans-to-manage-chevrolet-in-europe-through-the-economic-downturn/

      Either way, both the Insignia and Malibu would benefit from a slightly longer wheelbase, while leaving the overall exterior dimensions intact. That should stop all the crying about the supposed lack of rear seat legroom.

      E2XX for the win!

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    2. ???

      Would rather have a base BMW? I am sure you are right but the 3 series is about 50% more than a Cruze.

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    3. U are right Kyree, i reas some auto news here in France nd all tell Malibu is overprice, very noisy 2.0 diesel engine, bad insulation, inside materials look too cheap, LTZ diesel version is about 32.000 euro, crazy price!

      Reply
  3. This thread talks about a global presence of Opel beside Chevrolet, compared to Kia and Hyundai. But this is not true. Outside of Europe Opel is not a threat to Chevrole/Holden. How many cars will Opel sell in Australia this year? Perhaps 2000, the same in South-Africa. Opel was chased away from India because of Chevrolet some years ago. GM produces Chevys in Egypt while Opel has to import its vehicles. Opel has no presence in North-America and only a marginal in South-America (perhaps 1000 units in Chile per year) and in China (5000 units is nothing!). Even in Russia Chevy is pushed by GM while Opel has a market share of about 3%. BUT Chevrolet is threat for Opel in its home-market…Western Europe, the most highly competitive market. As Joe G. said, a lot of dealers offer Chevy beside Opel. That’s a problem. Are Opels offered worldwide outside of Europe beside Chevys? No, they aren’t! Opel has a great potential which isn’t used by GM. Opel could easily sell 50k to 100k units in China for example without making trouble to Chevrolet or Cadillac. Don’t look at Hyundai/Kia, look at Volkswagen who offer VW, Skoda, Seat, Audi worldwide. They have understood how to manage different brands.

    Reply
    1. Good analysis by the German and Alex

      I think that the Global Chevrolet/Cadillac will work just fine with some compromises for individual markets.

      Issue will be certain markets where history will cause some massaging of the strategy. In the short term will need to make compromises to the 2 brand strategy and MAYBE in the long term (20 years) they can swing the markets from their historical brands but most likely not.

      China- Buick needs to stay because of its history. GM would be nuts to not sell it there.

      England/Europe/Australia – Opel/Vauxhaul/Holden will need to remain in the short term and most likely the long term. GM needs to continue to revise their brand equity/pricing/content to put them in the middle of Chevy and Cadillac.

      I am very surprised the Malibu is so much more than the Insignia. This is most likely due to the Malibu being imported? Then again the Malibu is very low volume there.

      And the Cruze is another one. I would think it is imported from Asia? Must be content?

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    2. No, VW is not marketing Skoda and Seat worldwide.

      The introduction of Skoda to China is quite recent.

      Reply
      1. Ok, Skoda and Seat aren’t sold in EVERY country that’s right, but Skoda is present in nearly every big eurasian market and as I know in Africa. In China Skoda sold more than 200k units in 2011 and 2012, Skoda is also present in India and it aims to expand its global presence in the next years. Not far from now, Skoda will surpass Opel by numbers. Seat has entered China last year and sells in South-America.

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    3. “Are Opels offered worldwide outside of Europe beside Chevys? No, ”

      Wrong. Have a look at the website of the GM importer in the UAE (United Arab Emirates), Liberty Automobiles:;

      http://www.libertyautos.com/

      And at the web site of GM South Africa.

      Reply
      1. I mentioned South-Africa in my first post. South-Africa is a good example: Opel sold there 3k units in 2012 while Chevrolet sold 48k units. How many cars will Opel sell in UAE per year? perhaps some hundred… These few markets don’t make Opel a global brand, especially when Opel only sells marginal numbers. Outside of Europe including Russia and Turkey, Opel sold ca 20k units in 2012. That’s nothing!
        I have also to correct you and me concerning Seat and Skoda. They are both sold on every continent except North-America, although not in EVERY country but in far more countries than Opel.

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  4. Tbh I think it will only create a problem & one that the competition will exploit. GM already has a market leader in Europe in Vauxhall & Opel which are selling well & in terms of quality & image better many European brands, & equal the more prestigious ones. If its not broken don’t fix it.

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  5. Opel is like Buick and you have yet to see the new product that will move them away from Chevy yet.

    Keeping Opel will mean fixing them in a new position and killing them is a lot of negative press and a lot of cost. GM has to try to replant them in a higher place in line and try to increase profits but not have to worry about volume.

    Reply
    1. Opel is still a midsize brand. Moving it upmarket will take a long time, perhaps decades. So volume is everything now. Even premium brands like Audi or BMW sell more cars than Opel today because of their global presence. Every brand which is limited to Europe suffers: Ford, PSA, Renault, Fiat have all troubles but all of them sell much more (!) cars outside of Europe than Opel, or let me say are allowed to sell more units globally. And as if this wasn’t enough GM tries to push Chevrolet at all costs beside Opel in this very saturated market of Europe with nearly the same technology but for a cheaper price. (Don’t look at the base prices, they say nothing because Opel has currently to sell ist cars below value if it wants to gain its market share) And then GM is wondering why Opel is loosing money!?

      Reply
      1. It would not be Upscale as in top line but it wold compete with the top line VW and low line Audi area. If they want Cadillac in Europe Opel can not move up too much. Besides would people accept a ultra expensive Opel No!.

        GM has to have Chevy as most will be imported from places where they will be cheaper to build and more profitable. Pure and simple GM can not survive on Opel in Europe alone anymore and need to do what the others are doing.

        If it were not for the cost and bad publicity GM would cut Opel now. The German government I believe will start to work to help make things easier on Opel for GM. They know If they do not react that GM can kill Opel once Chevy is fully established.

        Reply
  6. It’s a conundrum for GM. Personally, I’m glad that GM has held onto Opel. Their styling and engineering is a plus for GM overall.

    I’m really not sure that GM moving Chevy to Europe. It makes more sense to me to have only Opel competitive in Europe, borrowing Opels strengths across the international board.

    It will take a Herculean effort to make opel competitive once again in the car saturated European market, but I think it’s worth the effort.

    Reply
  7. Opel is a mainstream brand in Europe and I see no reason why it should not be. Alex, what do you mean with moving upmarket the Opel brand? Opels main competitors are Volkswagen and Ford in Europe and the prices of Opel vehicles are very similar to VW vehicles. However, you should also know that Opel offers features which you can´t get on a Chevrolet, and therefore it makes the cars at the end even more expensive than a Chevy. Opel is already upmarket and positioned above Chevrolet similar to VW and Skoda, but Opel needs more cars such as the Cascada or an Omega successor. VW has the Touareg and Pheaton.

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  8. Best thing is Mii, GM has a ready made Omega & a Tourag rival ready for Opel to use in the Commodore & Enclave. All Opel’s upmarket rivals each have a model in these segments why not Vauxhall/Opel

    Reply
    1. Yes, but in my opinion an Omega successor should be developed by Opel and not a rebadged vehicle from another GM division. Think of the last Opel GT which was a totally flop in Europe, because it had nothing in common with the original GT and customers knew it was just a Saturn Roadster from America with an Opel sticker. In this segment it is also important to have the right image at least in Europe. However, it would make more sense for Opel & Vauxhall to have niche vehicles based on volume cars, e.g. an Insignia based Calibra, where Opel/Vauxhall can expand the range with a Calibra convertible or a liftback version (See Audi A5). VW did the same thing with the CC which was formely known as the Passat CC or the Scirocco which is actually a Golf coupe but more upmarket. I already saw the Enclave in Person, which looks good but too big for our roads. GM could sell it in the Middle East under the Opel brand, where customers like big American trucks and SUVs.

      Reply
  9. Alex, did you also compared the trim levels of the Astra and Cruze? Both cars may starts at 14,990€, but I guess the Astra offers less than the Cruze so you have to put more extras on the list, which is typical for German cars. The Astra 5-door which costs 14,990€, has in its basic version a 5 speed manual transmission and a gasoline engine with only 87 hp, while the Cruze 5-door which cost the same has in its basic version a 5 speed manual transmission BUT a gasoline engine with 124 hp! If I take the Astra with a 1.4 Turbo (120hp) then it starts at 18,190€. You see Opel is already upmarket and not cheaper than a Golf or Focus, but more expensive than a Chevy or Skoda.

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  10. The original Commodore was based on Opel’s Commodore & later Omegas, that suited various markets & tbh the Commodore/VXR8 is perfect. Statesman/Caprice versions could replace Senator & compete with A8, 7, Phaeton etc. As for the Enclave yes it might be a tank in size, but tbh isn’t that what the Q7, X5, M/ML & Tourag buyers want.

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  11. @Joe G. and “The German”:

    As to your demand to separate Chevrolet and Opel dealers … this is hadly a problem. Nearly all Chevrolet dealers are the dealership collected by Daewoo, the previous name of Chevrolet. Hardly any of them had anything to do with Opel or other mainstream brands before.

    Chevrolet appeared in Europe as the renamed Daewoo and competes mainly against the other Korean car company, i.e. Hyundai (with Kia), which are much more successful.

    But sure, some Opel dealers did take Chevrolet in, especially the chain “Brass-Gruppe” which sells many brands in their (more than 25) stores in the wider Rhine-Main region, about half of them Opel, Chevrolet and GM, the others deal with Alfa Romeo, Audi, Fiat, Ford, Peugeot, Skoda and VW.

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  12. Normally I have an opinion on the solution to the problem. But in this case I think I’m the same as GM, clueless about what will prove to be the right move and wishing I had a crystal ball. This is very complex, so many factors. I just hope they find the right solution.

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  13. No mass marketer has broken into the prestige brands. But Opel has made money from the likes of Omega and Commodore. A de-contented and restyled Cadillac ATS would be an ideal way of moving upmarket. An even smaller outlay would involve importing Holdens. Sales would be few but enough to upset the order in Germany and get the public to view Opel in a different light. The only real cost would be an adequate parts and support network. Why should Vauxhall have all the fun with hot Holdens? Opel needs to break out of its mould and do something odd to get recognized.

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  14. In Australia, Opel priced their vehicles a little higher than their Holden equivalents and most competitors as well. Opel really is trying to appear more upmarket…. yet when they launched, they made a big deal about the Opel Astra returning to Australia (previously it was sold as the Holden Astra in Aus.) which is odd considering Holden is an everyday/normal market brand. Aussies are treating Opel with the same state-of-mind as buying a Peugeot or a Renault. European quality and class but cheaper than the luxury brands and more expensive than class leaders and everyday brands. Translation, only those who like the Euro brand will buy them. Also, Australia has the most competitive market with 70 or so brands and just 1.112 million new cars sold in 2012 and that was the most in the market’s history…

    Reply
    1. Hi, @Holden4Life, can you let me know where to find official statistics about new car registrations in Australia, like I can find such statistical data for Germany at http://www.kba.de , or for GB at smtt.co.uk ?

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        2. Thanks for providing the link to the FCAI!

          But their information is prohibitingly expensive – 320 AUD(*) for a full national report — and its usage limited by a copyright clause: “©Reproduction of VFACTS reports in whole or part, without prior permissio n is strictly forbidden”.

          Compare that to Germany infamous for its prussian-style burocracy, where most of this information is available for free and for everybody!

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  15. Unusual to hear them talked about in the same breath as Peugeot & Renault these buyers tend to buy on price & have no or little interest in cars. Vauxhall/Opel traditionally compete with Ford & VW whist occasionally taking sales off both Audi & BMW too.

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  16. With regard the Buick Enclave being too big for Europe here is a comparison with Audi Q7 both are measurements to the nearest inch, Buick L202, W79, H72. Audi L200, W78, H68. With its 3.6L V6 & a borrowed 2.8L Duramax Diesel surly this could work in Europe.

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  17. I taking note of the good information and facts from your website. Thanks for sharing this base prices of competing chevrolet & opel vehicles in Germany. It is not hard to understand why GM would market essentially the same vehicles under different brand names.

    Reply

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