Opel reveals 10-year plan

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10 Jan, 2013 12:49pm Jack Rix

Following continuous losses in Europe, Opel has revealed details of its exciting 10-year plan for growth

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.”

Disqus - noscript

Good news to see some Chevy models are going to be built in Europe, although that really does not bother me to much.

Most of the Opels and Vauxhalls models are made in Germany which employ the most expensive labour in the world, so l still think GM are going to find it very hard to get its labour costs under control. So GM are starting with one arm tied behind their back.

Nice to see GM are being refreshingly honest that they acknowledge that some of their cars are boring, that the first step the getting better & improving things, but once again looking at some of the 5 new Chevy cars coming out at the Detroit auto destined for Europe, l am still not convinced at all these cars will help get Chevy established in Europe, would personally buy any of them, to be brutally honest with the truth, they don't appeal to me one little bit, and l would buy a Chevy branded car as my first choice, there is still that big disconnect of what the buyer wants and what is on offer.

Chevy need to come with cars that yield big profits, the Camaro & Corvette could have help to cut into those big GM losses but were ruined with LHD options only. How many RHD Chevys were sold by GM in the USA the answer is none, so why should we be expected to buy them in the UK, they also need to have engines that are more relevant to European fuel price.

GM also need to offer more model types that we don't have in Europe, at least one RWD car that goes head with the BMW 3 Series that is a top 10 best seller, also GM make the some of the best pick-up trucks in the world and you can't buy one in Europe , that is an absolute sin in itself. These are both high profit yielding vehicle that won't sell in high numbers but they will create a big profit, only downer GM have to many duplicated FWD Chevy/Opel/Vauxhall models that complete for the same sales, they need weeding out a bit, as they all come with extra design/marketing costs that Ford don't have.

I wish Steve Girsky and GM the best of British luck with their "Drive 2022" plan, hope it all works out well for them.

".. interim president..."

Fills you with as much confidence as a certain London-based football club with an interim manager

Old Fred, that is a fine opinion comparing to the list of hate comments regarding Vauxhall brand. I am an Opel fan since none of the 4 vehicles I have owned for the last 10 years has convinced me it is a rubbish brand. No serious issues with them at all. But I doubt there will be a RWD car since the above-Insignia model has been stopped and within the competitors (VW, Ford, French cars) nobody is offering a mid-sized RWD vehicle. It is rather a wish than profitable reality.

So to rescue the embattled Opel/Vauxhall (given a large proprtion of cars sold are Vauxhall I think it's fair to acknowledge at least the badge) they are going to tie up with the massively failing Peugeot-Citroen. Way to go!? That will really make people flock to the dealerships. What surprises me most from this article is just how small a player Opel/Vauxhall have become (though Vauxhall have a strong 2nd place in the UK which should be acknowledged) GM really should have let Opel/Vauxhall go when they could.

The problem is that the Chevy brand in Europe has been used to produce some awfully cheap euro-boxes in recent years and there really is no appetite for American cars which has been proven time and again every time they have tried to bring them over here. Chevy or Chevrolet as it is known over here sell cheap unwanted cars. In fact putting the Chevrolet badge on the very successful Daewoo Matiz pretty much killed it dead and has done ever since. Not sure what GM's answer in Europe is, but Chevrolet is not one, and tying up with PSA who have enough troubles of their own is not the other! They have massive dealer networks, and the know-how to do well, they just cannot seem to design the cars to appeal

Daewoo Matiz has wrecked Chevy brand at conception in the UK, but hopefully as the newer Chevrolet designed models start filtering though it will lift Chevrolet off of the rock bottom JD Power position it holds year after year.

Shame Chevrolet only sold LHD versions of the it's Camaro and Corvette, if Chevrolet only sold RHD Cruzes Stateside sales would only be 3 a month instead of 20,000.
Shame Chevrolet wrecked its US models chances with just LHD options as the UK is the biggest buyers of sports cars in Europe

Great to see you have had a great experience in being able own 4 fantastic Opel Cars Pavol, wish l could do the same in fuel efficient RWD RHD Vauxhall in the UK, l feel have been locked out of the Vauxhall car buying process by GM of Europe.

Rwd Jaguar and Land Rover are adding another 800 jobs. Sales are up

In fact nearly all the quality RWD makers are making lots of money in Europe, Porsche are making lions share of profits at VW, Roll Royce sales are booming, Ferrari, BMW and Mercedes Benz profits are stable in Europe.

It's very sad to watch great companies like Ford, Fiat, GM and Citroen/ Peugeot losing billions in big losses. Just would like to see let's say if GM had 50 FWD models between them at Chevy/Opel/Vauxhall why can't we have just 1 RWD RHD fuel efficient car high profit yielding car . It might not sell as well as an Astra or Corsa but the profits it would yield would be massive.

Both BMW and Mercedes Benz made it into the UK top 10 best seller list yielding big profits for those companies, there must be a business case for one fuel efficient RWD RHD at GM in Europe, even the BMW 3 outsold the Ford Mondeo at 2:1 ratio, and the Ford Mondeo never made it into the UK top 10 sellers list.

AEX 1330
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