Opel CEO Karl-Friedrich Stracke is seeing “many signs of progress” in the business of General Motors' Opel/Vauxhall unit, according to an internal letter that he sent to staff. He said there are signs that the business is improving but he claims to not be absolutely satisfied with the figures. He said that Opel surpassed the plans for cost reductions in raw materials in the first quarter.
However, this could boost the contribution margin of the Astra to cover fixed costs and for Great Britain, it found an “attractive partner” in Banco Santander with regards to vehicle financing. Stracke said that Opel’s market share in Russia grew by over half a percent.
This is the single major growth market it has outside of Europe with 2.8% in the quarter. Last Thursday, GM said that for the first quarter, it incurred an underlying loss of $256 million in Europe. This is primarily because of a distinct decrease in sales volumes, its best result since the second quarter of 2011, when it had gotten a small profit. Analysts had predicted a bigger loss.
But instead, Opel had lower losses than the $562 million loss in the previous quarter. Restructuring talks between GM and its European unions are ongoing. According to CFO Dan Ammann, GM is working hard to reduce costs in Europe while raising sales there.
He decided not to provide details on the broader restructuring plans. He said that the “big bang” that everyone’s waiting for may not happen. Instead, there would be a “series of actions” to bring the business to a level that they want it to be at.