The president of General Motors Europe, Karl-Thomas Neumann, is marking exactly two years in the job at the Geneva show having made considerable strides to update the Opel/Vauxhall product portfolio and powertrains and exercise the cost controls necesssary to return the group to profitability by next year.

There remain, however, two very dark clouds on the horizon. The first is the collapse of the Russian market and potential problems in the eurozone if Greece cannot sort out its debt levels. The second is the apparent ‘war on diesel’ being waged by European cities anxious about air quality.

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“We know the mechanics of how to get back to profitability,” Neumann said. “The first is cost reduction, and we have worked on that. The second is growth, which I will come back to. The third is a huge material costs initiative, which is why in future everything for Opel and Vauxhall will be built on GM globally developed modular architecture.

“But we cannot cost reduce Opel and Vauxhall to break even. We need to sell more cars. We lost market share for 15 years in succession but for the last two years we have been able to grow. Not by much, but last year the European market was up by 1.7%, which was disappointing, while our share was up by 3.4%.”

Neumann was recruited on the basis of a promise from GM top management that its European divisions are now regarded as a crucial part of the group’s ambitions to become “a leading global OEM”.

“Some things were much better than we thought, but some things were much worse,” he said. “In Russia there are two problems. The market is down by 40%, and linked to that is the valuation of the rouble. 

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“A lot of production is not localised enough so cars have to be imported and it is hard to make money. That has forced us to increase our prices, which means we have lost more market share. St Petersburg [the site of GM’s Russian plant] has gone from three shifts to one and production has been reduced even with that, and I have just announced that in March we will close the factory completely until the middle of May because we don’t need the cars.”

Neumann said he was “very concerned” with the anti-diesel sentiments coming out of many European cities. “We have made a commitment to the EU to achieve 95g/km [fleet average economy by 2020] and we have the technology to achieve that,” he said.

“The cheapest way is with gasoline engines but they will not be sufficient. The next cheapest is diesel, and we have reduced the particulates from those to a minimum. The most expensive is electrification. We have a plan to achieve 95 grams with all new engines plus a litle bit of electrification.

“But all of a sudden there is an attack on diesel. No-one is taking the time to look where the particulates are coming from, which is old cars and buses. If we make cars more expensive with more after treatment and so on, no one will buy new ones so there will be even more old cars on the roads.”