The Vice Chairman of GM and interim president of GM Europe, Steve Girsky, has revealed details of a radical 10-year plan for reviving Vauxhall and Opel’s fortunes in Europe - and he calls it “the biggest comeback in European automotive history”.
Despite selling more than a million cars a year, GM Europe has lost $15billion over the last 10 years. This new plan - dubbed ‘Drive 2022’ - is designed to lay the foundations to break even by the middle of this decade, and turn to increasing profits thereafter.
“I’m not expecting a huge recovery any time soon in Western Europe,” Girsky told us. “We can’t rely on volume to bail us out.”
The basic plan is simple - to increase profits while driving costs down - but Girsky breaks that down into three distinct phases. The first is to optimise manufacturing costs, sharpen the brand image (especially in Germany where it’s seen as boring and sales have slumped) and reduce the cost of materials.
The second phase is to match supply more closely to demand, produce cars that are currently made outside Europe locally (Chevrolet cars, for example, will now be built here) and launch additional variants with the help of partners such as PSA. “If we’ve got something that’s working, we should put our foot down and keep going with it,” said Girsky.
Finally, he wants to grow market share in growing economies like Russia and Turkey, break into the top five brands for customer satisfaction and ensure factory utilisation reaches around 90 per cent. Girsky added: “Why will this work? Because we have a new team on the field, a new company culture and we’re not relying on hope as a strategy any more.”
However, none of this is possible without the right cars on the market. “Building the brand is great, but we need the right product to succeed,” explained Thomas Sedran, GM’s Vice President of Strategy and Operations. “This business is all about product.”
Vauxhall launched six new cars in the UK last year - including the new Adam, Mokka and Astra VXR - and was the fastest growing retail brand. Judging by a slide flashed up during Girsky’s presentation, there’s no sign of slowing down. In total, 23 new Opel/Vauxhall models and 13 new engines will be launched between 2012 and 2016, with many more to come in the six years after that.
Key to this rapid model expansion is GM’s joint venture with PSA, which includes the co-development of engines and several new platforms for small medium and large cars. These will allow GM to reduce costs dramatically and launch more variants of each model than ever before.
“Where products are European-specific, we should use PSA,” Girsky explained. “We know how to use scale, and they’re smaller and can do things quicker, it’s a good combination.”