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General Motors has long faced issues in the European market. After years of experiencing losses, as well as weakening sales, the brand earlier this year sold off not only its Vauxhall brand but even the Opel brand. Opel is the main brand name that GM uses in Europe with the exception of the U.K. In the United Kingdom, Vauxhall, a British subsidiary of Opel, uses its very own brand name.
GM had disclosed that its European operations experienced a $257 million loss, the 16th year it had done so. GM would then sell the Opel and Vauxhall brands to the PSA Group in a deal valued at $2.3 billion.
For those familiar with the matter, the European operations of Chevrolet, known way back as Daewoo, was also halted in 2013. This was after the Chevrolet brand experienced losses amounting to $18 billion over several years. The phaseout was completed by the later part of 2015. Saab, which is another GM brand, was initially sold in 2010 before succumbing to bankruptcy by 2012.Read the entire article GM hints at possible full-scale comeback to Europe
General Motors is pulling out Chevrolet from Europe by the end of 2015 and as a result, its assembly plants in South Korea would be saddled with excess capacity but GM now says that it has made adjustments and is now quickly recovering from the blow. CEO Sergio Rocha said that the four assembly plants of GM Korea accounted for around 20% of GM’s global sales in 2014.
GM announced its European pullout in late 2013. GM would be burdened with an annual excess capacity of 150,000 vehicles. Rocha has been quick to tap new markets and has acquired new production allotments, already making up for the sales loss.
The 55-year-old Rocha, a veteran of GM engineering for 35 years, said that GM made a “tough call” in getting out of European but he insists that it was the right one since the company had to stop the bleeding and avoid further losses.Read the entire article GM Korea reacts to Europe pullout by entering new markets, building new models
General Motors has named Andreas Schaaf as vice president of Cadillac Europe, leading the brand in the region. He will commence on his new post on July 1 and will report to brand global chief Johan de Nysschen. He is replacing Thomas Sedran, who will leave GM to pursue opportunities outside the carmaker. Les Turton, sales manager for Chevrolet Europe and managing director of the brand’s unit in the United Kingdom, leads Chevrolet in Europe.
GM is in the process of winding down Chevrolet and will stop its sales this year. Schaaf is a BMW veteran, entering the group in 1996 in product controlling, product management and strategy. He since has held several senior management positions in marketing and sales for the regions of Asia, Africa and Eastern Europe.
He was chief of BMW Group in India from April 2010 to November 2012, Schaaf was head of BMW Group in India, helping launch introduce the Mini brand in the market.Read the entire article GM names Andreas Schaaf as vice president of Cadillac Europe
General Motors is seeing its transformation in Europe getting completed on a good pace, as most of its dealers who used to carry Chevrolet vehicles are now selling only Opel-branded units. GM pulled out Chevrolet in Europe in 2014 to focus on building up its Opel/Vauxhall units.
The decision was lauded as it brought to an end a rivalry between two brands that had cannibalized each other’s sales while rendering them less profitable. Michael Lohscheller, Opel’s chief financial officer, remarked that the dealer transition from Chevrolet to Opel is working well, with 85 percent have converted to selling only Opel.
He said that in the past, a customer visits a dealership looking for an Opel but buying with a Chevrolet. He added that Opel will be developing a range of models aimed at former customers of Chevrolet.Read the entire article GM says most Chevy dealers in Europe now selling only Opels
General Motors has decided to drop its Chevrolet brand in Europe by the end of 2015, according to vice chairman Steve Girsky. The move is part of GM’s bid to turn around its European operations and to focus its efforts on resurrecting the beleaguered Opel brand. GM said in a statement that Chevrolet will no longer have a mainstream presence in both western and eastern Europe due to a challenging business model as well as the difficult economic situation in the region.
Girsky said the decision is a win for all their brands in Europe and around the world as “GM will benefit from a stronger Opel/Vauxhall." He noted that dropping Chevrolet in Europe "will help us to accelerate progress in the region." However, some of Chevrolet’s iconic models like the Corvette will still be sold in Europe.
GM said that Cadillac is working on expanding in Europe in the next three years. Chevrolet will remain in Russia. Chevrolet sells only 200,000 units annually in Europe since it was re-launched in 2005. Chevrolet has concentrated on selling small cars like the Aveo subcompact and Spark minicar. GM Daewoo builds most of the Chevrolet units sold in Europe, exporting 186,000 vehicles to Europe from South Korea in 2012.Read the entire article GM to remove Chevrolet brand from European market by end of 2015
Both General Motors and Ford Motor Co. posted smaller losses in Europe in the second quarter of 2013, which may signal the vehicle market has already reached it rock bottom and has started to recover. However, GM and Ford believe otherwise. The US carmakers believe that the lower losses in the second quarter of 2013 were just because they were able to successfully isolate the problem in Europe, partly thanks to a resurging market in the United States.
They are not bound to believe that the European vehicle market is on its way to recovery from the weak demand, which so far has caused them to bleed almost $2 billion each. The US carmakers managed to contain the damage of the weak European by borrowing some strategies they implement to get on their feet from the US recession a couple of years ago.
These strategies include aligning supply with demand and reducing output capacity where possible. The US carmaker has also been emphasizing retail over fleet customers and focusing on improved products and brand positioning.Read the entire article GM and Ford still unsure in Europe despite lower region losses
General Motors Co. reaffirmed a plan to position Opel as a more expensive brand in Europe and to create room for Chevrolet as its value offering. The plan was reaffirmed by Alan Batey, Chevrolet's new global chief, as the carmaker launches newer vehicles at Opel and sister brand Vauxhall with an aim to better GM's dire financial situation in Europe.
Batey said that they plan to build on the early strong demand for the Mokka small sports utility vehicles and the Adam minicar. Success of the Opel and Vauxhall brand will enable GM create space for Chevrolet to operate in Europe. Following a question as to how GM will differentiate Opel and Chevrolet in Europe, Batey replied that they need to rebuild the Opel brand.
He said that will provide GM with an opportunity to move Opel and Vauxhall "up a little bit," creating a "value opportunity" for Chevrolet." He noted that they have to make sure that there is a "little overlap as possible" between Opel and Chevrolet in Europe. Batey called Opel the mainstream brand in Europe and Chevrolet as the value play.Read the entire article GM to make Opel a premium brand in Europe and create room for Chevrolet
General Motors chief executive Dan Akerson wants the carmaker to have a fresh perspective for the Chevrolet brand in Europe. This could be attributed to the fact that Chevrolet and sister brand Opel have overlapping products in the region, causing them to cannibalize each other sales. The latest examples of such overlap are the Chevrolet Trax and the Opel Mokka subcompact sports utility vehicles.
Although Chevrolet asserts there are ample visible and invisible content differences that distinguish the Trax and the Mokka, both SUVs share the same platforms, engines and transmissions.
The Trax, however, has the price advantage, as it costs around EUR2,000 less than the Mokka in Germany. Akerson remarked that Opel strategy chief Thomas Sedran, who is taking over as the new head for Chevrolet in Europe, is the right person to determine how the two brands fit together in terms of price and vehicle content as well as where they are sold.Read the entire article GM CEO wants fresh perspective for Chevrolet in Europe
GM Financial Company Inc. has launched its new Opel Financial Services brand, after buying back European and other international operations of Ally Financial. With its German banking license – held by Ally -- back in-house, GM unit Opel/Vauxhall now hopes to offer cheaper loans and leasing deals. With an in-house service helping provide auto financing, Opel is expecting that the proportion of cars sold using financing to exceed the current level of 40 percent.
Meanwhile, rival carmakers could sell up to 50 percent of their vehicles through financing offers. According to Opel Chief Financial Officer Michael Lohscheller, Opel Financial Services will offer more attractive financing deals, including zero interest rates with no down payment.
He remarked that the launch of Opel Financial Services was a very important step for the brand and its product offensive, noting that the carmaker was not always in a position to make the best financing offer as it does not have its own bank like its rivals.Read the entire article GM Financial launches Opel Financial Services brand in Europe
General Motors said last Thursday that its first-quarter pretax loss in Europe decreased to $175 million from $294 million the previous year. This prompted analysts to state that while GM is making advancements in its plan to restructure its struggling Opel/Vauxhall unit in Europe, it still has much to do. GM is outperforming Ford Motor Co., which reported that its pretax operating loss in Europe for the quarter steeply grew to $462 million from $149 million the prior year.
GM was able to reduce costs in Europe by $300 million. As a result, the prices of its models were not changed. The figures in Europe imply that GM's cost cuts are beginning to offset the decreasing sales throughout the industry, which are nearing its lowest levels for the past 20 years. Chief Financial Officer Dan Ammann told reporters that the results in the first quarter are the result of the implementation of its plan for Europe.
Ammann said that GM is staying with its target of breaking even in Europe by the middle of the decade. However, he said that there are no signs that the region is facing a quick turnaround. He said that at this point, it’s too early to declare that Europe has hit bottom. He said that there are some things that the company is unable to control.Read the entire article GM making progress in restructuring its money-losing Opel/Vauxhall unit in Europe
Due to poor Chevrolet sales in Europe, General Motors Co. is widening the production cuts at one of its several factories in South Korea. According to a company official, the operations of this plant located in the southwestern city of Gunsan will be suspended for nine days, higher than the six days that it was idled in March.
The factory assembles the Chevrolet Cruze compact car and Orlando minivan and has a yearly production capacity of 260,000 units. GM has five plants in South Korea. The Korean unit of GM builds majority of the Chevrolet models sold in Europe and over 40% of those sold worldwide. Last Monday, the official said that the company is amending factory output in response to a drop in orders for Europe exports.
The official didn’t explain how much the output is expected to decrease. Chevrolet sales fell by 39% to 18,790 units from January to February in the EU, ACEA said. Meanwhile, the wider passenger vehicle market decreased by 10% amid the euro zone debt crisis and government austerity measures.Read the entire article GM widening production cuts in South Korea due to weak Chevrolet sales in Europe
General Motors Co. suffered its 13th straight annual loss in Europe after doubling its pretax losses in the region from $747 million in 2011 to $1.8 billion in 2012. The carmaker’s figures in Europe were well in line with its October 2012 forecast. GM’s continued financial bleeding in Europe underscore the rapid decline in vehicle demand and economic conditions in the region.
GM’s total losses in Europe have amounted to $18 billion since 1999. The worsening economic situation in Europe has forced GM to take a $5.2 billion non-cash impairment on long-held assets. It also forced the carmaker to write down the value of its investment in PSA/Peugeot-Citroen by more than half to around $200 million.
While the carmaker remains positive about its new Opel models like the Mokka and the Adam, its investors were not, as evidenced by the 2.7-percent in its shares. Dan Ammann, GM chief financial officer, told Bloomberg TV Thursday that they expect further deterioration in 2013 in Europe for the auto industry.Read the entire article GM lost $1.8 billion in Europe in 2012, aims to break even by mid-decade
In the latest fourth quarter, Ford Motor Co. had its lowest operating profit of the year. But there’s a bright lining in Europe. Ford is recovering more briskly in Europe than its rivals as it uses its revival in the U.S. as a guide. Ford has reported losses of over $1.5 billion for the full year in Europe and has predicted that 2013 will be no different.
When interviewed at the Detroit auto show, CFO Bob Shanks said that these losses will start to vanish in about two years. Peter Nesvold, a Jefferies Group Inc. analyst, said that Ford will be ahead of General Motors Co. by about a year in its efforts to overhaul operations in the region. He said that the automaker’s board has demonstrated more conviction in its European restructuring plan by doubling the quarterly dividend earlier this month.
In an interview, Nesvold said that Ford was able to achieve what it set out to do in North America without any external help. He explained that the issues in Europe are not identical but they are similar. In the fourth quarter, the revenue of Ford fell by 4.4% to $33.1 billion, the average of 11 estimates compiled by Bloomberg, from $34.6 billion the previous year. The average of 19 estimates is for 26 cents of operating profit per share, up from 20 cents a year earlier.Read the entire article Ford overtakes GM in Europe, as it is recovering more briskly on the market
According to an internal strategy document entitled "Global Assembly Footprint," General Motors Co. could increase its production capacity in low-cost countries and shut down its Bochum plant in Germany and Ellesmere Port site in the UK. German magazine Der Spiegel released this report after having been able to acquire a copy of this document.
This document also stated that if vehicle sales go up, GM would build more cars in countries like Poland, Russia, China, India, Mexico and Brazil. Der Spiegel said that it was presented with this document during a global GM business conference.
It also revealed that GM is planning to export 300,000 more vehicles to the European market from facilities in Mexico, Korea and China by 2016. A GM spokesman in Europe commented that it has not decided any plan related to whether Opel’s production will be transferred from Germany.Read the entire article GM plans to export vehicles from Mexico, Korea and China to Europe
General Motors Co. expects the auto industry in Europe to undergo a restructuring as sales and pricing take a beating, according to analysts who talked with GM’s management. In a research note on this meeting, Rod Lache, an analyst at Deutsche Bank, wrote that in the last 3 to 4 months, the vehicle pricing in Europe has considerably worsened.
In Lache’s estimates, each vehicle declined by $200. The meeting with analysts took place last Thursday over dinner in New York. GM was represented by Dan Ammann, GM's chief financial officer, and James Davlin, its treasurer. Credit Suisse analyst Chris Ceraso said that Ammann had remarked that Europe’s situation this time is different from the sales declines in 2008 and 2009.
The GM executives also said that sales won’t be given a boost this time by incentive programs by the government due to the region’s debt issues. Ceraso said that pricing is under pressure, especially with Volkswagen’s move to reduce prices and take some market share. Analysts think that the region can identify plants that have to be closed.Read the entire article Auto industry in Europe to undergo a restructuring, says General Motors
A Wall Street Journal report cited sources who said that there had been a “brief” discussion between General Motors and Fiat about a merger of their European operations earlier this year. The WSJ report cited insiders who divulged that the talks were attended by the CEOs of GM and Fiat, Dan Akerson and Sergio Marchionne.
They also said that the discussions didn’t reach board level. During that time, GM was also engaged in talks with PSA/Peugeot-Citroen that resulted in an alliance. The source said that Fiat hoped to convince GM that it would be a better partner than PSA. The WSJ said that any chance of a deal between GM and Fiat disappeared after GM's agreement with PSA was announced last month.
Last Tuesday, Marchionne said that Fiat was open to the prospect of entering partnerships with anyone, even with the recently formed tie-up between GM and PSA. Presently, Fiat and PSA have an existing joint venture to produce small commercial vans in Italy.Read the entire article Report: GM, Fiat talked about a merger of their European operations
General Motors Co. and PSA/Peugeot-Citroen are holding negotiations over a possible European alliance to develop engines and produce vehicles together, according to a person familiar with the situation. Should the negotiations succeed in forging a deal, the alliance could cover 11 plants of GM's Opel unit with PSA's 12 European manufacturing sites.
The efforts could be seen by some as a possible solution to plug companies’ losing European operations, but there are analysts who are critical of the possible alliance. Max Warburton at Sanford C. Bernstein expressed doubt that the alliance will produce a difference in the companies' outlooks, saying that "Two wrongs don't make a right."
Warburton remarked that both Opel and PSA cannot restructure independently. He said that there is no reason why putting PSA and Opel together would speed up the process of plant closures, noting that both carmakers have excess capacity.Read the entire article GM-PSA alliance might not fix their problems in Europe
General Motors Co. has to spend a minimum of $1 billion in Europe so that its operations in the region could be revived after having suffered increasing losses here, according to estimates by three analysts. In last Friday’s note to investors written by lead author Joseph Spak, an analyst at RBC Capital Markets in New York, he said that the cost would probably be steep and the savings won’t be immediate.
RBC estimates that for this year, European restructuring expenses will go as high as $600 million in 2012 and $400 million in 2013.
Last Thursday, GM reported that its European business, which includes Opel/Vauxhall, posted a $747 million loss before interest and taxes last year after reporting a loss of $1.95 billion in 2010. This represents its 12th annual loss in Europe. GM’s losses in the region have amounted to $15.6 billion since 1999. Four analysts said that for this year, there will be a $1.2 billion deficit.Read the entire article GM to spend $1 billion to revive its operations in Europe
After retiring next month, former General Motors Europe President Nick Reilly will transfer to Asia as an adviser. When interviewed by Automotive News Europe, Reilly said that several firms have asked him to be a member of their board, specifically companies who want an expansion in Asia. Reilly, who is now 61 years, had been a top GM official in Asia for several years before he was moved back to Europe to run Opel/Vauxhall when GM chose not to sell Opel/Vauxhall after the U.S. parent emerged from bankruptcy. He is credited for the turnaround of the former Daewoo Motors in Korea, which GM purchased in 2001.
He got a promotion to president of GM Asia Pacific. He then became the head of GM International Operations, which is based in Shanghai. Reilly supervised GM Europe's restructuring from 2009 until January when Opel CEO Karl-Friedrich Strack became GM Europe president. Reilly’s career started in 1975 when he entered the former Detroit Diesel Allison Division in England. At some point in his career, he also served as the head of Vauxhall and GM Europe's sales and marketing chief.
He said that the most difficult period of his career was the discontinuance of car production at Vauxhall's Luton, UK, factory in 2000. He was confronted with the same decision once more in 2010 when he presided over the closure of Opel's factory in Antwerp, Belgium, under a restructuring that had eliminated 5,800 jobs and a fifth of GM's capacity in Europe. Reilly’s retirement from GM is in March. He said that he will move to Malaysia but he clarified that he won’t be working for Malaysian automaker Proton. No other details were given.Read the entire article Former GM Europe President Nick Reilly will transfer to Asia as an adviser
General Motors Co. announced that there will be more cost cuts for its loss-making European unit following the failure of the last turnaround plan to end losses there. GM Chief executive Dan Akerson said that the company has to match capacity with demand, and since Europe’s demand has been falling, the carmaker also has to cut capacity.
Akerson said the company is considering all options just to achieve “a better break-even point, a lower break-even point, and scale," adding that there is more to come in the next couple of months. The company’s European operations, which include Opel/Vauxhall, posted $747 million in losses in 2011 before taxes and interest. The loss was significantly lower than the unit’s losses in 2010, which reached $1.95 billion, but it reflected the company’s failure to achieve the break-even it had planned.
GM announced in November that it was withdrawing its break-even forecast as the European outlook worsened. Akerson is looking forward to implement a similar strategy GM utilized to recover from bankruptcy almost three years ago and that had catapulted the company back as the world's largest automaker. The company then closed plants and implemented job cuts in the US, cutting costs while increasing sales.Read the entire article General Motors sees more cost-cutting measures in Europe
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