AUSTRALIA: Axed Opel dealers praise compo claim handling - report

By Graeme Roberts | 16 October 2013

Despite their new brand being axed after barely a year, Australia's 22 Opel dealers reportedly have praised local General Motors management for their handling of compensation claims following the premature closing 'down under'.

Dealers, who were outraged that their investments were being wasted just a year into sales of the brand, were gearing up for a major class action, GoAutoNews reported. 

The report said many dealers’ claims amounted to between A$2m and $3m, including investments in new premises designed exclusively for the brand at Opel Australia’s insistence.

However, Opel dealers who spoke to GoAuto have "heaped praise" on the company - and its managing director Bill Mott - which has offered an estimated $40m-plus to its dealer group as compensation.

A dealer told GoAuto: “I think the way it was resolved is unprecedented. There is no other car company that would have done what they did. But I think if they had not done it that way they would have been facing a class action. I think they knew that.

“Having said that, a message needs to be flagged to all manufacturers that this was a disgrace and that it should never happen again,” he added.

In a 1m a year new car market, that has seen the arrival of several new Chinese and Indian brands in recent years, as well as the local distribution rights for some US and European brands change hands, another dealer said Australian car retailers would now think twice before taking on new franchises that insist on very strict premises rules before the brand has proven itself locally. 

GoAuto said the various settlements included covering trading losses made in getting sales momentum for the brand, handing over the service tools and spare parts at no cost, allowing dealers to hand back cars to clear their floor plan finance accounts for Opel stock and generous compensation of premises costs which covered most or all the cost of the buildings, furniture, signage and fittings.

Dealers reportedly were also offered stock still held by Opel at an average trading bonus of $7000 a car although not all dealers participated in that offer. GoAuto said it understood Opel was still holding 700 cars on its own account and that steps were being taken to begin "trickling" these cars through General Motors' local Holden dealerships.

Meanwhile, Holden dealers who not originally awarded an Opel franchise are now being encouraged to take on parts and service support for Opel car owners.

Dealers told GoAuto the process was handled “delicately” and was “consultative”. But they described the pullout after such a short time as a “disaster that will trash the Opel brand for years to come and make it harder for Holden dealers to sell Opel-sourced products in the future”.

As well as the cars sold under the Opel brand itself, GM's Australian unit has previously sold Opel-built Corsa, Astra and Vectra models under the Holden brand and nameplates though sourcing switched in recent years to GM Korea models which are mostly branded Chevrolet elsewhere. The Opel Vectra was assembled locally as a Holden for a few years in the late '90s.