General Motors’ former European subsidiary, Opel, reported a $250 million loss in the second quarter 2017. GM recently sold the unit to French automaker PSA Group after owning it for roughly a century.
According to German auto publication Automobilwoche, the automaker was losing 4 million euros ($4.74 million) every working day. The figures represent an increase of $40 million from the $210 million lost in the first quarter of 2017 under GM.
General Motors sold Opel to PSA Groupe, the owner of the Peugeot, DS and Citroen brands. The move removes million of units from GM’s annual sales volume while removing from its balance sheet a loss-making unit. Opel posted multi-million dollar losses under GM for well over a decade.
In May, PSA Group CEO Carlos Tavares said that he expects Opel to continue losing money in 2017 but is looking to return Opel to profitability no later than by the 2020 calendar year, with operating margin goals of 2 percent that year and around 6 percent by 2026.
Comments
If Ford can make money in Europe then there is no excuse for Opel to fail.
Opel has too many factories, enough capacity for 1990s volume. German and UK plants are too politically costly to close but Spain, regardless of lower labor costs needs to close.
Low sales models like Cascada need to go. Opel should have been sharing more SUV models with GM, like Envision. Now, PSA models– even a revised, plus Cautus–need to be reskinned and customized.
Vauxhall and Opel can turn a profit with the proper product mix and industrial plan.
That Cascada is a profit center… just because it’s low volume doesn’t mean it’s low in profit, especially given the enojemos amounts of parts sharing and hence scale economies with the Astra.
But yeah, the crossovers sound have been shared big time with Buick, especially the Envision. They could have also derived a midsizer off the C1 for Buick-Opel-Vauxhall as well, but didn’t. Strategy fail all around.
Return Opel to profitability no later than by the 2020,then 6% profit a few years later.Lets face it the remainder of this year & into next year sales are not happening,this is why all the special deals are popping up.Not only with opel but throughout the industry.The likes of Vauxhall ,which can produce 200k vehicles is close to 80k & slipping all the time.The question is do we try to get plants working to full capacity.Increase in volume is not going to happen soon,so are we talking plant closures so volume can be shifted elsewhere.Not sure what capacity Peugeot plants are running in France for example,only know Poland/England & Germany well down with no upturn in sight.Big changes required,as for profit in just over 2 yrs,erm ,I think dream on Carlos.Saying that he did say he has never closed a plant,,,,,,so double erm!!
How’s that “profitable by 2020” target going Opel?! LOL.