The recently restructured ‘new Opel/Vauxhall’ unit of General Motors, based in Rüsselsheim, Germany, will use country-specific branding, streamline and cut costs, launch new models into new market niches and explore export opportunities outside Europe, CEO Nick Reilly told employees in a memo on Monday.
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Promising “mutual trust and support” and “complete transparency of activities”, he said: “We have decided that our face to the external world will simply be Vauxhall in the UK and Opel in the rest of the world.
“In internal communications we will use Opel/Vauxhall.”
The revamped unit aimed to be a leading European manufacturer of high quality, desirable automotive products, based on German engineering, respected world-wide.
“It’s time for Opel/Vauxhall to be clear winners again and to be recognised as clear winners,” Reilly told workers.
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By GlobalData“We need to take bold decisions and be held accountable for those decisions. By taking the right decision, we will reverse the downward trend in market share, we will return to profitability, we will have a brand that people want to buy and be associated with and we will lay the foundations of sustainable success.”
He said Opel/Vauxhall had proven technical capabilities, a strong dealer network, a skilled workforce, a strong heritage [Opel marked 110 years of automaking in 2009; Vauxhall dates back to 1903 – ed] and enjoyed the goodwill of many outside the company who wanted to see it succeed.
“We will lead through our products… We will lower our cost levels so that we can be profitable in a weaker market and we will use that profit to reinvest in new products, new technology and new facilities,” Reilly said.
He promised Opel/Vauxhall would launch new products in new market niches. While he was happy with the new Insignia and Astra, and the upcoming redesigned Meriva, the automaker had, for example, no entry in the mini segment, no planned successor for the previous generation Corsa-based Combo light van, was not leading in hybrids or pure electric vehicles and its traditional powertrains had “mixed performance in fuel economy, CO2 and driveability”.
“We intend to address these as quickly as we can,” Reilly said.
He added that the company would also look for opportunities to sell Opel products outside Europe as well.
Its products have in the past gone as far as the US [sold through Buick dealers], Australia (badged as Holdens), New Zealand (Opel and Holden), Japan (Opel) and South Africa (Opel and Chevrolet). Many Chevrolet brand South American models built in Brazil are also based on Opel models and architecture.
But Reilly said: “In the past, Opel has not been able to make money selling outside Europe and the current strong euro will not help. However, I am convinced that with the right product, a strong image in Europe, and enough money to build the business in other countries, we can and will grow our exports outside Europe profitably over time.”
He said the company’s immediate need was to deal with a very difficult market environment with 2010 western European volume 1.5m units lower than an already weak 2009.
As just-auto reported recently, JD Power has forecast a decline of 10.5% to 12.19m units this year.
“So, we need to move fast,” Reilly said.
He said Opel/Vauxhall would shortly introduce a new advertising campaign based on the German slogan ‘Wir leben Autos’ (‘We Live Cars’).
“We will maximise the strength of our new products, we will be innovative in our concept cars at auto shows and we will address the issues of image,” he promised. “Aftersales must contribute strongly to the results and our dealers need to feel a new confidence in the brand.”
Opel was working on restructuring its manufacturing operations to reduce the break-even point and Reilly stressed to employees the need to be very cost conscious in all areas, especially during this “difficult” year. Expenditures that could be deferred would be and every possible measure would be taken to streamline the company’s structure and reduce spending.
“We cannot afford to have any country or any product losing money in the long term,” Reilly said.
Referring to recent calls for greater autonomy between Opel/Vauxhall and parent General Motors’ headquarters in Detroit, Reilly said: “In some ways I agree with this and the pendulum swung too far to the side of a global communality, not respecting local or regional needs and differences of customer preferences.
“That is why we are stressing the need to have our design and engineering people, together with marketing, ensure the Opel/Vauxhall DNA is in every car we sell and all our external communications.”
But he added: “While we need the authority and autonomy to make the right decisions for Opel/Vauxhall, we also need to recognise the huge benefits we derive from being part of the GM family. We benefit from the leverage of our global technology, our global architectures, our global purchasing volumes, our global manufacturing process, our global IT systems and so on.
“We should also not forget that we have been, and continue to be, kept alive during this long period of losses by financial support from Detroit.”
