Chevrolet News:Chevrolet Will No Longer Sell Mainstream Vehicles in Europe

[Drew Dowdell]

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Drew Dowdell

Managing Editor - CheersandGears.com

General Motors announced today that starting in 2016, Chevrolet will no longer compete as a mainstream brand in Europe, instead focusing only on what GM calls "Iconic vehicles". GM's mainstream role will be carried by the Opel and Vauxhall brands.

Most of Chevrolet's mainstream vehicles sold in Europe are produced in South Korea. GM expects Chevrolet to maintain its mainstream position in Russia and the Commonwealth of Independent States.

The remaining Chevrolet vehicles in Chevy's EU portfolio will be models such as the Corvette and Camaro. Cadillac is continuing its 3 year plan for an expanded presence in Europe.

GM expects a number of one-time charges in the $700 million to $1 Billion range for the final quarter of 2013 and first quarter of 2014.

What do you think of GM's announcement to pull Chevy out of Europe and concentrate on Opel? Sound off below.

Press release on Page 2

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For Release: Thursday, Dec. 5, 2013, 3 a.m. EST

GM Strengthens its European Brand Strategy

· Opel/Vauxhall to compete as GM’s mainstream brands across Europe

· Chevrolet to focus on iconic products in Europe

· Cadillac to expand in Europe

DETROIT – General Motors today announced plans to accelerate its progress in Europe by bolstering its brands in the mainstream and premium segments.

Beginning in 2016, GM will compete in Europe’s volume markets under its respected Opel and Vauxhall brands. The company’s Chevrolet brand will no longer have a mainstream presence in Western and Eastern Europe, largely due to a challenging business model and the difficult economic situation in Europe.

Chevrolet, the fourth-largest global automotive brand, will instead tailor its presence to offering select iconic vehicles – such as the Corvette – in Western and Eastern Europe, and will continue to have a broad presence in Russia and the Commonwealth of Independent States.

This will improve the Opel and Vauxhall brands and reduce the market complexity associated with having Opel and Chevrolet in Western and Eastern Europe. In Russia and the CIS, the brands are clearly defined and distinguished and, as a result, are more competitive within their respective segments.

Cadillac, which is finalizing plans for expanding in the European market, will enhance and expand its distribution network over the next three years as it prepares for numerous product introductions.

“Europe is a key region for GM that will benefit from a stronger Opel and Vauxhall and further emphasis on Cadillac,” said GM Chairman and CEO Dan Akerson. “For Chevrolet, it will allow us to focus our investments where the opportunity for growth is greatest.”

“This is a win for all four brands. It’s especially positive for car buyers throughout Europe, who will be able to purchase vehicles from well-defined, vibrant GM brands,” Akerson said.

Chevrolet will work closely with its dealer network in Western and Eastern Europe to define future steps while ensuring it can honor obligations to existing customers in the coming years.

“Our customers can rest assured that we will continue to provide warranty, parts and services for their Chevrolet vehicles, and for vehicles purchased between now and the end of 2015,” said Thomas Sedran, president and managing director of Chevrolet Europe. “We want to thank our customers and dealers for their loyalty to the Chevrolet brand here in Europe.”

The majority of the Chevrolet portfolio sold in Western and Eastern Europe is produced in South Korea. As a result, GM will increase its focus on driving profitability, managing costs and maximizing sales opportunities in its Korean operations as the company looks for new ways to improve business results in the fast-changing and highly competitive global business environment.

“We will continue to become more competitive in Korea,” said GM Korea President and CEO Sergio Rocha. “In doing so, we will position ourselves for long-term competitiveness and sustainability in the best interests of our employees, customers and stakeholders, while remaining a significant contributor to GM’s global business.”

With the decision that Chevrolet will no longer have a mainstream presence in Western and Eastern Europe, GM expects to record net special charges of $700 million to $1 billion primarily in the fourth quarter of 2013 and continuing through the first half of 2014. The special charges include asset impairments, dealer restructuring, sales incentives and severance-related costs, and will pave the way for continued improvement in GM’s European operations through the further strengthening of the Opel and Vauxhall brands. Approximately $300 million of the net special charges will be non-cash expenses. In addition, GM expects to incur restructuring costs related to these actions that will not be treated as special charges, but will impact GM International Operations earnings in 2014.

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[Robert Hall]

Ok....hmmm...reversal from the effort to sell the Spark, Sonic, Cruze, etc in Europe..I guess they aren't selling that well there..

[Drew Dowdell]

Europeans are rather particular about the nationality of the brands they buy, though where the vehicle is actually manufactured appears to matter a lot less.

Home Country > European Country > Foreign Country

American branded cars are not well thought of unless they are the "icons" mentioned in the article... or the Dodge Caravan or Chrysler 300 strangely.

[Robert Hall]

So the strategery sounds like local brands (Opel, Vauxhall) for the FWD volume cars and CUVs and keep Chevrolet and Cadillac for the niche good stuff ('icons').

[Drew Dowdell]

Pretty much. I thought from the start that putting Chevy in the EU was a bad idea because... well.. I've been there and talked to some of them. The Germans don't think much of Opel's old $h!ty cars... and Opel still carries plenty of that baggage... but at least they are German old $h!ty cars. Chevy started out there selling rebadged Daewoo $h!ty cars. So you can take a guess what the Germans think of American branded, Korean built, $h!ty cars.

[G. David Felt]

Seems to show that the baggage of GM is going to haunt them for life. If they can truly change the perception of Opel / Vauxhall auto's then fine. But I think the sales issues are more a dealership issue as the dealerships are old dinosaurs that suck and need major refreshment.

[ZL-1]

Glad to see GM following a coherent long-term strategy [\ sarcasm]

[Robert Hall]

Glad to see GM following a coherent long-term strategy [\ sarcasm]

Same old, same old bumbling...I thought Chevrolet was going to be the international brand, sold everywhere ala Ford, Toyota, Honda, etc..

[Drew Dowdell]

Europeans are rather particular about the nationality of the brands they buy, though where the vehicle is actually manufactured appears to matter a lot less.

Home Country > European Country > Foreign Country

American branded cars are not well thought of unless they are the "icons" mentioned in the article... or the Dodge Caravan or Chrysler 300 strangely.

I was thinking about this over lunch and feel that I have to amend this comment. The exception to this rule is Ford. Europeans, and Germans in particular, tend to see Ford of Germany vehicles more as European cars rather than American cars.

[Robert Hall]

Europeans are rather particular about the nationality of the brands they buy, though where the vehicle is actually manufactured appears to matter a lot less.

Home Country > European Country > Foreign Country

American branded cars are not well thought of unless they are the "icons" mentioned in the article... or the Dodge Caravan or Chrysler 300 strangely.

I was thinking about this over lunch and feel that I have to amend this comment. The exception to this rule is Ford. Europeans, and Germans in particular, tend to see Ford of Germany vehicles more as European cars rather than American cars.

That is because for 100 years or so European Fords have been built in Europe and were usually distinct from US models. Ford in Europe has long been as European as Opel.

[riviera74]

Chevy as a European brand was always a laughable idea. GM should pull Chevy out right now rather than wait until 2016. Also, GM probably needs to ditch Opel and Vauxhall right now since Europe STILL has not fully recovered from 2008 and is in far worse economic straits than the USA.

Edited December 6, 2013 by riviera74

[ehaase]

I would just align Chevrolet, Opel, Vauxhall, Holden, and the lower end of Buick China with the same products under different names.

[daves87rs]

Actually, I'll go against the grain here. I believe it is a good idea.

I've talk to a few friends who live overseas, and they do not think that highly of chevy anyways. While they kinda consider opel junky, two of the three of them would still buy opel over chevy, which they think they just sell $h!ty korean Aveos anyways....

[regfootball]

Germany and Japan both very xenophobic on their car choices

[G. David Felt]

So to me the BIG QUESTION?

Would it make more sense for GM to kill off the Chevy, Opel and Vauxhall name plates and come up with a new name plate for a auto company focused on the Euro market that would appeal to the Euro Customer? This would then have no history and could have a clean plate to start from.

[avant1963]

Wasn't this all hatched when GM planned to sell Opel? So Chevy would have been the only brand. So now that Opel stays (and has much better recog) and Chevy goes.

[Drew Dowdell]

They re-launched Chevy in Europe in 2005, so about 3 to 4 years before the big event that prompted talks of the sale of Opel.