General Motors To Move Opel Upmarket, Position Chevy As “Value” Brand32
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.
- Sweepstakes Of The Month: Win a 2023 Corvette Z06 Convertible. Details here.
Thing is, that everybody wants to move upmarket, yearning to keep profits high with the higher margins of “upmarket” products in a market of shrinking volumes. PSA, for example, has declared the same intention for its Peugeot and Citroën brand. Space is going to be crowded up there, with the risk that somebody might fall over the edge.
I disagree, you can see the move upmarket now each product taking it a step further. Also many prestige brands are moving slightly downmarket so it’s likely they will meet in the middle.
With regard PSA upmarket LOL, they cannot sell desirable models in the budget end of the market what chance do they have against established premium opposition that understands quality & desirability
This is not confirmation that Opel is moving up market it is a confirmation they are keeping Opel.
The plan all along has been to move or make Opel higher grade as Chevy was coming in no matter what. The real internal debate has been does Opel live or die and can they stop the losses there.
I see this as good for Buick as it will let them have the ability to have more volume for cars many here will like.
The real challenge will be not only to make Opel profitable but to get Chevy acceptance in Europe to grow. As of now Chevy is not where they need to be.
This is the same drivel we hear all the time from GM, hopefully sometime in the not too distant future GM will get it through their thick skulls that Europe doesn’t NEED, WANT or LIKE Chevrolet. Why they persist wasting time and management resources on trying to force the brand down European car buyers throats is beyond any logic, Chevrolet have plenty of other markets to develop where they are well liked but Europe is definately not one of them. Both Vauxhall in the UK and Opel in mainland Europe have a broad enough range to cover most sectors of the market on their own.
It is simple economics as GM right now could abandon Europe and while they would lose global market share they would be more profitable.
Opel’s can not get cheaper and Europe is going to need cheaper cars over the next 10-20 years as the Euro is not going to shift much and many of the countries are not our of the economic failure mode yet.
GM needs to do a better job marketing and it will take time to grow the brand. No model walks into any market and takes the lead not even Chevy.
The key here is not so much to be number one in Europe but to learn to build and sell Opel and Chevy in Europe to maintain market share with two brands and to do what Opel alone is not doing now and that is making a profit.
Even Ford, Peugeot, Fiat Opel are losing tons of money there so I do not believe it is just the Chevy brand alone but the fact that people in Europe just do not have the money to spend on many new cars.
Even the likes of the big German companies VW are focusing on export markets more and more even building plants here in the states and Mexico as they know they can not make it alone on the Europe base.
The fact is things have shifted in Europe and companies all of them are going to have to find ways to do business differently in Europe. Even odd things are killing sales like in Italy the Super car sales are down to nothing as people are afraid of the government seeing the car and catching them on taxes they missed of did not report. Few Ferrari’s and Lambo’s are sold in Italy last year and the same is happening this year.
The world is in a economic mess right now and it all could fail fast if one segment drops as we are all connected anymore.
No matter If you agree or not Chevy is going to Europe and it will take time to build their line there. The key is GM offering the right cars at the right price. They need to really focus on cheaper smaller cars that get great not good MPG. If they can provide this they will make it. they may never be Number One there but as long as they gain market share and remain profitable then they can call It a success.
“sell Opel and Chevy in Europe to maintain market share with two brands” — actually four brands:
Tbh I’m not overjoyed about Chevy in Europe, but it’s GM’s choice they are so that’s that. I’ve heard the European market is going in two directions (prestige & budget) obviously one firm cannot do both.
Ahh, the foibles of a global economy. Everybody wants to be everywhere(which in some respects is o.k.)but sometimes it just doesn’t work.
The point everybody seems to be missing is that Chevrolet has been in Europe for years now, they have spent a fortune on sponsorship ($550m) they already offer small economical cars AND THEY HAVE GOT NOWHERE. As an example Dacia started selling cars in the UK 6 months ago, spent a fraction on advertising and marketing by comparison and now sell more cars than Chevrolet!! In any event the idea that Vauxhall & Opel can’t cover all sectors of the market is wrong, they used to do it with the Senator and Monza, Vauxhall already have a VXR8 as a small selling halo model so it can be done. But Chevrolet is offering cars that compete directly with Vauxhall Opel’s target market, either Chevrolet has got to get into bargain basement pricing or Vauxhall Opel have got to move into Audi / Mercedes territory which is impractical.
Opel is already upmarket, e.g. the Astra and Cruze cars starts at 14,990€ in Germany, but 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. Opels main competitors are Volkswagen and Ford in Europe and the prices of Opel vehicles are very similar to VW vehicles.
Dose this mean we will get a much needed Omega, maybe a Senator & a large SUV. Several Coupe / cabrio models from Calibra sized up and a sports car along the lines of VX220 with posh showrooms too 🙂
Opel really could of think and done that whenever Chevrolet enters the European market so that you wouldn’t have models that are overlapping
Chevrolet does not cannibalize Opel sales and the other way around. The real competitors for Opel are Volkswagen and Ford. However, Hyundai and KIA became dangerous to most European car makers. I don´t think that Opel and Chevrolet have models that are overlapping except for the Ampera/Volt, Captiva/Antara and Mokka/Trax. The Adam and Spark are both positioned in the same segment, but traget completely different groups of costumers: those who want a cheap little car (Chevy Spark, Hyundai i10, KIA Picanto, Fiat Panda etc) and those who want a lifestyle vehicle which is a bit more expensive (Opel Adam, Fiat 500, VW up! etc). As long as both brands are not cannibalizing each other I see no reason why Opel and Chevrolet can´t have models which compete in the same segment. Should Volkswagen stop building the Audi A3, Skoda Octavia or the Seat Leon, because of the Golf?
You forgot to mention about Astra and Cruze
“whenever Chevrolet enters the European market” — that has happened 9 years ago, in 2004, by rebadging the already established Daewoo brand with cars and dealer network to “Chevrolet”.
9 years hadn’t realised it had been so long, sales have been similar & haven’t grown since 2004.
What is a mainstream brand to you? In Germany, Mercedes-Benz is a luxary brand but it is also the second best selling brand and you see more Mercedes-Benz vehicles on German streets than Chevys, so this would make Mercedes-Benz a mainstream brand. A value or budget brand doesn´t mean higher sales and there is no guarantee to be successful in Europe. Europeans are very loyal to their brands and the reputation of a brand is also very important. Most of them would take a less well equipped BMW 3 series over an Opel Insignia, which offers more features for the same money, but who wants brand with such a bad reputation?
Jj232, are you trying to imply the Insignia has a bad reputation or Vauxhall & Opel has? They compete with the likes of VW, Audi & BMW because they have a good reputation & build quality desirable cars. Yes people are loyal in Europe & for the record 3 series or Insignia I’d take the lnsignia.
Not to me and I really like the Opel brand, but I know a lot of people who think like this.
This is a step that has been already in play for 3-4 years. But the changes have been slow and it will take time to move these models around with each new intro. Opel is doomed with out Buick so they will gain support there and it will move them up more as Buick moves to fill the void Cadillac is leaving. China will love the higher scale Buicks too as this fits their new middle upper class there well.
Vauxhall will follow Opel where ever they go and just swap badges with them. They will be Opel as Holden is to Chevy.
Cadillac is no ready for Europe yet. they have to get the LTS in place and I am sure they are working on a better distributor there this time that will not dump them and they will also offer much better product. Now keep in mind Cadillac is not going to replace anyone you Europe but they just need to see a stake in the market and work to see some growth in that segment over the years. They will have to earn their spot there as even a better car will not replace German loyalty easy.
“Vauxhall will follow Opel where ever they go and just swap badges with them. They will be Opel as Holden is to Chevy”
It is a bit more involved than swopping badges, all Vauxhalls have a different suspension set up to equivelent Opel models in Europe – the standard settings are not suited to UK road conditions. This is carried out by a team of chassis engineers at Vauxhalls proving ground at Millbrook led by dynamics team manager Gerry Baker.
Also so far this year Vauxhall sales are up 14.41% with an 11.4% market share which now means more than 20% of ALL GM sales in Europe are Vauxhall in the UK. This is a higher market share than GM have anywhere in mainland Europe.
In addition Vauxhall are becoming more involved in vehicle development, to quote from a recent Vauxhall press release “llustrating the depth of Vauxhall’s engineering and manufacturing excellence in the UK, the Sports Tourer is assembled solely at Ellesmere Port for export across Europe, while its upper-body structure was 100 per cent engineered by Vauxhall engineers based at Millbrook, Bedfordshire with key dynamic elements tuned for UK roads by the same team”
sources: vauxhall.co.uk smmt.co.uk vauxpedia.com
You know what I meant about the global platforms.
We all know there are minor suspension tweaks and engine tweaks per markets. That will not change
The bottom line is the same basic cars will be sold and just adapted to each market. There will be a couple single market models here and there like a Traverse etc. but generally the most models will be 85% percent the same around the world.
The changes you make point of are small in the big picture of the platforms in small markets like the UK.
The real issue is GM meeting all the different crash standards in each market with the same platforms.
There was a interesting story in I believe the most recent Car and Driver pointing out some of the many crash standard challenges of each market.
By the way post the number of sales and not the percentages as the sales in Europe tanked last years so a percentage gain is easy to post but in real numbers it often is quite small. The car companies can play that game but the reality to those who look at the raw numbers know better.
“small markets like the UK. ” Are you having some sort of a joke – the UK is GMs 4th largest single market – on that basis what is the German market then? Tiny with Opel’s 6.7% market share!! In the UK the actual increase in numbers is nearly 20,000 more cars sold in the first 6 months of this year compared with last year. Time to get real.
“Vauxhall engineers based at Millbrook, Bedfordshire with key dynamic elements tuned for UK roads by the same team” gives rise to two questions:
a) What are the special features of roads in the country UKoGBaNI to necessitate different “key dynamic elements” different from all other political territories in the world?
b) How many engineers do work in that Millbrook, Bedfordshire center?
a) What are the special features of roads in the country UK to necessitate different “key dynamic elements” different from all other political territories in the world? UK roads are well know for being amongst the worst in Europe so the cars need adapting for it.
b) How many engineers do work in that Millbrook, Bedfordshire center? At present there are 85 Vauxhall personel based their full time
It’s difficult in Europe, Lexus has the worst sales in Europe & Chevy little better.
The hole thread is a little bit strange because Opel-CEO K. T. Neumann announced some days ago that Opel will offer more exclusive cars but for a lower price than comparable competitors. He also said that Opel will stay mainstream while Chevrolet will appear much more American in the future to border it from Opel cars! So I don’t think that Opel will become a premium brand like Audi or BMW! It will be positioned like Volkswagen but with a better price performance ratio! Example: The next gen Zafira will be cheaper than the current one, as Neumann said!
So I don’t understand why is GM is desperately trying to push Chevrolet! They should have understood that there is no room for another low-cost mainstream brand in Europe!
The German, slightly confused as to that, if no premium models at top end ie executive saloons & many coupes & convertibles and it will stay as it is, then Chevy will be more American (how they have A,B,C and D segment cars like the rest of the world) then this sounds like they are both targeting the same buyers which don’t make any sense.
This is what Neumann said! He didn’t say that there will be no premium cars but such cars will be cheaper than the ones of the competitors! He also said that Opel will stay in in the “middle of society”, so be a mainstream brand with stylish cars. He describes not the current situation but the strategy for the future! So perhaps Chevy will change its portfolio in Europe and no longer offer “Korean-looking” cars like the Spark.
So, Opel will be moved upmarket, yes, but only very slightly!
I’m no expert but I feel Audi & BMW could be vulnerable if a desirable above average brand was to establish its self once again into the higher premium market with a few high end models.
As for Chevy maybe they are patiently waiting for a budget brand/s to fall