Automotive News [sub] reports that Opel is moving upmarket. It's GM's attempt to "democratize technology" and emphasize their Euro-brand's "traditional German manufacturing attributes." The new strategy is designed to move Opel away from its image as "the European Chevrolet"– so that Chevrolet can become the European Chevrolet. "Opel and Chevrolet will be bookends with a clear position for both," GM-Europe President Carl-Peter Forster promises. "Over time, we will emphasize Opel's German heritage, engineering and design." But don't worry: GM plans to keep the German domestic affordable. "We are not talking about a premium price for Opel," Forster said, "but a one percent to three percent increase is foreseeable." Design, technology and image are all part of the brand touch-up– not, Forster insists, a "reinvention." Yes well, Europe is facing a premium small car glut as Fiat, MINI and others seek full-sized profits from compact cars. With GM dependent on overseas sales to keep the wolf from the door, Opel had better hope this gambit pays off.
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Why does GM need Chevrolet (and Cadillac) in Europe again?
“Why does GM need Chevrolet (and Cadillac) in Europe again?”
Because more brands equals more market share, just like GM has demonstrated in the US these past 40 years …. er, never mind.
So they can badge Korean cars as Chevrolets.
I feel like I’ve seen this story a number of times before.
But a one to three percent price increase? Quite ambitious.
A one to three percent price increase doesn’t even pay for the increased cost of the steel in the car, never mind the platinum or the copper.
A 1 to 3% increase in price?
On a completely unrelated note, didn’t Toytoa say they were going to increase their prices by 3% to reflect rising raw material costs?
Also, Opel are going to emphasise their German heritage. What about Vauxhall?
If Opel doesn’t mess the Corsa everything will be fine with them.
The current one is hot. Sadly, around most of the world, GM sells the Aveo.
Opel’s precipitous market share drop in Western Europe mirror’s GM’s in the US. Stay tuned for a GMDW on the subject (GM’s global woes).
Paul Niedermeyer,
GM Europe posted a £126 million loss in 2007
It won’t work.
GM and Ford has NEVER worked as upmarket premium brands in Europe. They will always compete in the mainstream, with Peugeot/Citroen, Renault, the Fiat Group and so on, and with Volkswagen on top. Since the demise of the british empire in the 70’s, and Rover and Triumph, only one brand has managed to go upmarket, and that’s Audi. And it has taken them 25 years, and they still are not “there” yet. And “there” is of course, on top of the ladder, with BMW and Mercedes. Ford has a solid hit in the Focus. Volkswagen is what all families aspire to with their Golfs and Passats. Last time I checked, the Mercedes C-Klass was the third most sold car in Germany. That’s some heavy competition for going upmarket.
Both GM Europe and Ford Europe has tried to go upmarket before. Ford in UK in the 60’s with the Zodiac/Zephyr. Their most expensive model was called the Executive. And how many executives traded in their Rovers, Alvises, Jags and Triumphs for that car? The european Granada was a better car, but upmarket? Hell no, it was always seen as a very americanized european bastard. Opel hade similar cars with the Kapitän, Admiral, Diplomat. Some equipped with chevy V8’s. For Both Ford and GM in the 60’s taxi fleets were the biggest buyers of those cars, as they were as big as the Mercs, but not as expenisive. People in need for a luxo-barge wouldn’t even touch them with a ten foot stick. They could compete on price, but not on brand cachet. Opel made their latest attempt in the late 70’s, with the Rekord/Omega-based Senator. It soldiered on to the early 90’s. Ford’s most similar attempt was the Scorpio, known in the US as the Merkur. And that was the last time we heard something, anything, of US brands going upmarket in Europe…
What GM Europe actually could do, is “pull a Ford Focus” and invest heavily in r&d to benchmark the competition. Traditionally, Ford, Opel and VW has been the three competing rivals in the middle segment, in various times, the three has had various hits on their own. They are so competetive to each other that they for almost forty years has tried to launch segment-busters at the same time, to prevent the rivals to corner the market. VW has managed to go upmarket in the last fifteen years, and that gap is felt quite strongly now. But I seriously doubt that GM has the money needed for that operation. Ford succeeded with one model, the Focus. And that’s that. When GM is talking about “going upmarket”, what they really mean is, they are lusting for the Golf.
Meaning they are unsuccessful at keeping costs low and the bean counters think they can throw some chrome and fake wood at it and pretend to be upscale. It should work as well as all their other attempts to sell cheaper cars for more, like the Cimarron.
Paul said: “Stay tuned for a GMDW on the subject (GM’s global woes).”
I’m looking forward to it!
GM China is the only bright spot for the former empire and their partners are poised to pull the rip cord whenever they feel like it.
Lackluster products, spaghetti on the wall marketing strategies and General Incompetence seem to be the rule of the day. But hey, at least the General owns the nicest office building in Detroit lock, stock and barrel!
Ingvar : It won’t work.
GM and Ford has NEVER worked as upmarket premium brands in Europe.
When Ford finally discontinued the Scorpio, the original plan was to sell the then new Lincoln LS in its place. At the last minute, Ford purchased Volvo and the plan to sell the Lincoln LS in Europe was scuttled. Ford seemed to think it could sell the Volvo and Jaguars to people desiring premium autos.
Similarly, General Motors seems to think it could sell Saabs, and small Cadillacs (the BLS, CTS and SRX) to European customers. Of course, it is not working for GM so all they have left is to attempt to do something to sell more Opels.
Personally, I’m tired of everyone continually trying to move upmarket. Too often all that happens is that the product becomes more expensive, but not any better.
What can you expect from people who thought the Cimarron was entry-level luxury?
Yes, we have to concede that Opel’s Admiral, Diplomat and Senator, and Ford’s Executive, were not accepted by Europeans. But now we’ve figured out how to say “upscale” with authority: coming soon to showrooms across Germany — the Studebaker Dictator!
I didn’t know about Fords plan about the Lincoln LS. But I remember that it was built on the same platform as the Jaguar S-Type, however somewhat technically decontended. Until the mid 90’s, there were a market for cars in Europe that were big, but not premium. Ford and Opel had big cars, as did Peugeot, Renault, Volvo, Citroen, Alfa Romeo. 5-series/E-Klass sized cars, but not in that price range. They were all hovering around the near-luxury segment. The point is, you could buy a big car that wasn’t necessarily expensive. That market is all gone now, as the smaller premium cars has taken over, like the 3-series, A4 and C-klass. Perhaps Ford could have won a few sales with an LS in Europe, I don’t know.
If Saturn is Opel in America, and Opel moves upmarket, what does that make Saturn? Buick?
@Ingvar: You're so right. Selling upscale cars in Europe is extremely difficult, and it just doesn't work for mainstream brands. I have helped a number of friends car shopping in Europe and whenever I recommend a VW to them, I hear "Why would I get a VW when I can just get a SEAT or Skoda for less money?" And that's just VW, which has attempted to be at the top of the mainstream market in terms of premium-ness. As for other mainstream brands in Europe, many of them sell based on being cheap cheap cheap. Look at how much car, power, and kit you get in a SEAT or Citroen compared to a VW or Alfa or even Renault (depending on the class). Opel should be what Opel has been: cheap, mainstream cars. They don't need delusions of grandeur, they need to make money. Besides, didn't Opel already try this with the Signum? Look at the miserable sales failures of cars like the (gorgeous) Citroen C6 and Peugeot 607. Big, expensive, mainstream branded cars just don't sell in Europe.People just get the Audi A6 2.4D or Mercedes E270 CDI instead.
Yes, however, both the Peugeot and Citroen are mostly sold to patriotic frenchmen. The french are therefore not accountable in this matter, and their market is apparently big enough for them to sell those cars in that segment.
The Opel Signum and Renault Vel Satis were two interesting experiments. What has to be remembered is that almost all expensive cars in Europe are heavily subsidied fleet sales to middle executives as company cars. Almost all Volvo V70s, Audi A6s and so on. Usually, there’s a tax break in the near of 30 000 dollars, so therefore there’s a market for strippers in that range. The point is, those buyers are heavily conservative. They will buy whatever is considered the premium brand to have in their position of the corporate ladder. And now it’s Audi, BMW and Mercedes. There’s a small position for being quirky, but that is not nearly as big as the market for another me too A6.
They will buy whatever is considered the premium brand to have in their position of the corporate ladder. And now it’s Audi, BMW and Mercedes. There’s a small position for being quirky, but that is not nearly as big as the market for another me too A6.
They don’t have a choice really. Because cars are way more expensive in general over here (in Europe that is), and yes, almost all cars from the EUR 25000 and more range are fleet sales, but their owners still have to cough up the monthly lease price that comes with their choice of car and depends heavily on resale value of that car.
So yes, you can buy a C6 for the same amount of money you’d buy an A6/5/E for, but in 4 years the C6 will be worth $5, while the germans still have some value. This translates to much higher monthly payments if you make the progressive choice (if you actually CAN in the first place, with the fleet sales and all) to lease something else.
The Germans just succeed in making cars that are desirable and look good even after 4/5 years, where the French/Americans/Japanese don’t. That’s their problem.
Apart from that I feel there is a definite slump in the popularity of the Golf that has been there since the Golf V succeeded the Golf IV. The old one looked way better (like a quintessential Golf) and had better interior plastics.
The forthcoming redesign better be good…
Btw, small thing Audi A6 2.4D or Mercedes E270 CDI instead.
Audi doesn’t make a 2.4D and if fact hasn’t done so since the Audi 100. The 270CDI was discontinued because the 5 cilinder diesel couldn’t get through the emissions laws. Otherwise you’re right, people choose BMWs, Mercs, Audis, maybe the occasional Volvo…that’s it.
@JJ:
Whoa – no more E270 CDI. I look away for one minute and bang, it’s gone and has been replaced by the E280 CDI. I assume the E-Class will also get the new 4-cylinder 2.1 liter turbodiesel labeled as an E250 (The 250’s 204 hp is more than the E280 CDI has, I think).
And yeah, totally flaked out on the Audi 2.4D.
In any case, I agree with your comments. Audi, Merc, and BMW really have the exec market sewn up. And truth is, mainstream brands are shrinking with “luxury” brands growing. BMW’s 3-Series really has put the hurt on the Mondeo.