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.
|SEGMENT||OPEL||OPEL PRICE €||CHEVROLET||CHEVY PRICE €||COST ADVANTAGE|
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.