Just as GM’s sale of its European Opel-Vauxhall unit to PSA Group settles, news that the automaker is in the process of developing what it calls a “Vehicle Set Strategy” has surfaced.
According to a report from The Detroit Free Press. The strategy consists of using six general sets of parts to build any GM vehicle globally, from the Chevrolet Spark, to the Cadillac CT6, to the GMC Sierra. Of the set of six, Opel would have used just three: front-wheel drive based minicars, subcompact and compact vehicles, plus midsize sedans and SUVs.
GM President Dan Ammann said that in this plan, Opel would have accounted for only 20 percent of the automaker’s global production of vehicles moving forward.
“GM will also be able to reallocate research and development, engineering, manufacturing, and marketing investment once required for Opel to brands and regions that offer more potential for profit,” IHS senior analyst Stephanie Brinley said.
The sale of Opel also lets GM save roughly $1 billion a year thanks to not needing to develop products that meet European regulatory and market demands, which is an investment that can not be shared with other regions.
Comments
I hope they are correct. So far, all of their downsizing has resulted in better products…but much less choice. Ten or more years ago I would have been able to choose between a Malibu, Grand Am, Alero (or Cutlass something), an Aura, a 9-3 …and possibly a Regal all on the same platform. Now, it’s either the Malibu or Regal and I’m partly afraid that the only reason there is such a large differentiation between the Regal and the Malibu is because of Opel.
Opel would have used the three most popular GM global kits. As for Opel-specific product, that it’s what PSA partnership is for. I’m sure that a company like Ford may have been interested in a cost saving co developed European alliance.
GM is being silly searching for a justification for European failure.
Perhaps it is all about brand perceptions. Opel attached to GM does not have the same brand value as VW, BMW and Mercedes, similarly neither does Vauxhall. Holden suffers from the same predicament in Australia.
The success of the Europeans and the Japanese in the US suggests this is a major problem for the GM in the US going forward.
The only answer is investment in producing the worlds best, most innovative, and satisfying products.
Given GM squandered it advantages in the sixties in the pursuit of ever more cost efficiencies this is an enormous one term task.
The question remains, will it’s institutional investors have the patience.
“The sale of Opel also lets GM save roughly $1 billion a year thanks to not needing to develop products that meet European regulatory and market demands, which is an investment that can not be shared with other regions.”
The author’s colleague or boss Alex Luft tells a different story, namely that GM will re-enter the European marketplace with Chevrolet and Cadillac cars, without having to bother with purportedly so different European regulations.
I see a red herring here.