Vauxhall’s sales slump is well documented. This year, new registrations fell 35 percent in the United Kingdom. The market in total fell 12 percent, which pushes the brand far past the average.
But, Vauxhall will likely survive as an Automotive News report stated earlier this month. PSA CEO Carlos Tavares sees value in the brand and believes there’s something to rebuilding the iconic British brand. And even despite talks to shut down the Ellesmere Port plant, the facility will likely survive for years to come. Why? Brexit.
“It wouldn’t be smart if management just says we close Ellesmere Port and suddenly there are trade barriers and we have no production capacity in this important market and lose access,” Wolfgang Schaefer-Klug, Opel’s top labor representative, said.
Opel’s turnaround plan, revealed earlier this month, calls for greater synergies between Opel, Vauxhall, Peugeot and Citroen. It’s also worth noting Vauxhall sold more cars than Peugeot and Citroen combined. Clearly, PSA sees opportunity, even if may sell fewer cars, but extract greater profits from each vehicle sold.
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Don’t think there should be too much surprise at the decline in Vauxhall’s numbers, given total UK sales are down by over 12% – albeit the extent of the decline in Vauxhall’s sales performance is greater than might have been expected.
Firstly, they lack a credible mid-size SUV option, with the Grandland X not set to appear in showrooms until early next year. This sector is a critical part of the UK market today.
Secondly, Opel Group’s strategy under KTN was to trade price against margin; you don’t need to be a rocket scientist to figure that if you increase the price of something, demand for it will decline.
Thirdly, since many Vauxhall vehicles and many components are imported from the Eurozone – Vauxhall has less wriggle room over pricing than companies with a larger UK manufacturing footprint e.g. Toyota, Nissan, JLR – whose sales have all increased.
Fourthly, given Vauxhall’s historic dependence upon diesel engine cars, with diesel vehicles making up the majority of Vauxhall sales – they’re going to be take the brunt of any move towards petrol, hybrid and electric. Vauxhall doesn’t have a single electric or hybrid offering. In October alone, diesel sales fell by 30%, whilst electric and hybrid vehicles now account for c.6% of UK car sales.
Fifthly, the fleet market which is of prime importance to Vauxhall – especially for Astra and Insignia sales – has contracted considerably. Last month, fleet sales declined by more than a quarter.
Sixthly, earlier in the year, Insignia sales were constrained by supply issues following the release of the Mk 2 model and the full Insignia range is not yet available in the showrooms.
And finally, the UK market continues to move away from ‘bread and butter’ brands towards higher end brands and value brands. Hence, Ford’s sales have declined by 8%, Peugeot is down by 16%, Citroen is 18% lower, Renault’s 15% lower, Mazda’s 16%, Fiat 24% lower etc. By contrast Maserati, Porsche, Infiniti, Jaguar, Land Rover and Mercedes sales are all up and in the value sector, Hyundai, Kia and Dacia have also gained market share.
The good news is that none of these issues are insurmountable for Vauxhall.
Well said!
I can only add that Vauxhall would be a great brand for sale in India. PSA performs badly there, The Griffin would be a good replacement.
Yes, with the possible exception of the USA and the Republic of Ireland, Malta and Cyprus, I could see Vauxhall performing well in many Anglosphere and Commonwealth markets. India superficially makes sense; so too Australia and New Zealand.
Incidentally, looking more closely at the promotional photograph… something doesn’t quite add up. It’s presumably taken at the end of the finishing track at Ellesmere Port which currently produces Astra 5-door and Astra Sports Tourer models.
However, looking more closely at the vehicles parked up on the track on the LHS and everything else parked up behind the lead, black Astra looks either like a last generation Astra model or else a Russelheim produced Insignia. Look closely at the front bumper inset moulding which on the latest generation Astra turns down, whilst most of the cars in the photograph turn up.
If I recall correctly whilst the last generation and current generation Astra were in production at the same time – this was in different plants, with last generation models produced in Gilwice for a few months alongside new generation models at Ellesmere Port. And whilst the Vectra Mk. 2 hatch was produced at Ellesmere Ports following the demise of Luton Car, its successor the Insignia has never been produced anywhere else?!?!
They are already closing Ellesmere. PSA has got the begging bowl out again I see.