GM News: General Motors Will Remain In Europe As A Niche Player

[William Maley]

As General Motors begins to close the sale of Opel and Vauxhall to PSA Group, there are questions as to what GM will do in the European market afterwards. According to Automotive News, GM is planning to become a niche brand with selling Cadillac models, along with the Chevrolet Camaro and Corvette.

“That is the plan at this time, to continue with those models and brands in Europe. We continue to grow the Cadillac brand. We’ll continue to do that in a very disciplined fashion,” said GM CEO Mary Barra on a conference call this morning.

Cadillac has been trying to make end roads into Europe for a decade with middling success. Last year, Cadillac's 45 dealers in Europe (mostly in Germany and Switzerland) sold 781 vehicles, up 33 percent when compared to 2015. The brand has the goal of selling 5,000 vehicles yearly in Europe by the end of this decade. This includes sales of the Camaro and Corvette which are doing much better - more than 1,800 models sold last year. 

Source: Automotive News (Subscription Required)

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[G. David Felt]

Yawn, They are going to have to change the dealership experience and marketing if they are going to grow and become a sales force in Europe.

I hope they truly build some class leading dealerships with service to match.

[NINETY EIGHT REGENCY]

I am glad we know and have an idea of GM's plan for Europe. That will take some work to build on Cadillac. I heard people discussing elsewhere that Buick may go to Europe too. Who knows ?  GM is playing a different game and a new game. 

[daves87rs]

Good luck with that.....

[Cmicasa the Great]

Pessimism is high with some I see. 

Look the bottom line is that GM, as a foreign company, has a hard time breaking even with Opel/Vaux, let alone making a profit.. as evidenced by the 17 years of profit loss. Think about the fact that they have LOST $20 Billion since 2000. That's not chump change.. and it has more to do with the Unions over there and its close connection with the gov'ts and brand loyalty than anything else. See the fact that Ford has a hard time as well. I venture to say that had GM not had Opel last year.. they would have pulled in $14 Billion gross as opposed to $12B. The loss of 1.2 Million units can be picked up too.. even if they simply looking to expand incrementally in the US, China, S. Korea and S. America. Hell.. GM could pick up about 500K sales alone just by going back into a fleet sales.. despite their profits not being as high.. they still could make an ACTUAL PROFIT off of them. 

Of course I see the positive. What Wall St, enthusiasts, and realists alike have wanted for the last 20 years.. for GM to stop chasing sales and chase profits allowing for better products. I also find it silly to think that their engineering will suffer since airplanes exist, allowing them to, at will,still go the ring.. and headhunters exits..allowing them to hire who they like. Lastly.. if size is an issue.. GM still has the option of simply merging with FCA and instantly being #1 again

 

Last year GM sold 9.97 Million.. putting them in #3 behind VW and Toy.. and slightly ahead of Rena/Nissan at 9.96 The loss of 1.2 Million would result in them having been at 8.77 last year still keeping them at #4. Keep in mind that this still resulted in GM being more profitable than almost all.

[G. David Felt]

I agree with @Cmicasa the Great that this sale will work in GM's favor. Yes as @Drew Dowdell has stated, GM did play a financial shell game with Opel/Vauxhall and I think focused on the engineering gain. That has run it's course and with a focus on profits and a global platform global sales of select name brands. GM long term will grow and do ever better.

We all agree that there are far too many nameplates and production capacity around the world. Europe is not the growth market that China is and GM can do much better by servicing China, North America and South America better as they then grow with a profitable plan Europe.

[smk4565]

781 Cadillacs sold all year?  Ouch.   Not really even worth trying.

Dumping Opel/Vauxhall was the right move though.  Shed those brands and legacy costs, focus on other markets where you make money.

[G. David Felt]

1 hour ago, smk4565 said:

781 Cadillacs sold all year?  Ouch.   Not really even worth trying.

Dumping Opel/Vauxhall was the right move though.  Shed those brands and legacy costs, focus on other markets where you make money.

Shedding the money bleeding division will help them focus on growing all markets including Europe for GM divisions. I see Chevy and Cadillac all over Europe and doing better once the money bleeding O/V division is gone.