Opel/Vauxhall to invest more in lineup but will offer models with lower prices

Article by Anita Panait, on June 22, 2012

Opel/Vauxhall would stop selling its vehicles at upscale prices and instead, they will be made more affordable to attract more customers and to regain its traditional customer base, chief executive Karl-Friedrich Stracke told the Automotive News Europe Congress. Stracke quipped that they “moved Opel up too quickly,” and in the future, they will make adjustments to make their cars more affordable.

Stracke revealed that Opel has no plans to cut investments in new products despite the current European debt crisis. Opel’s CEO said that they will make a significant investment in the company’s product portfolio despite plans by its some of its key competitors to cut product investment spending. Most notable of them is Italian carmaker Fiat, which will be reducing product development investments by EUR500 million.

Stracke reiterated Opel's plan to unveil 23 new or refreshed vehicles until 2016, including the Mokka subcompact sports utility vehicles and the Adam minicar. The brand also plans to introduce 13 new powertrains, including three new engine families.
According to Stracke, "Product is king and the key to future success." He revealed that Opel will combine its product offensive with new sales strategies aimed at attracting new buyers and at the same time regaining traditional customers.

Stracke said he aims to return Opel to sustainable profitability but did not provide a timeframe. Stracke’s turnaround strategy includes: improving the capacity of vehicle assembly plants; improving production efficiency; leveraging GM's global organization; and finding synergies from the GM and PSA/Peugeot-Citroen partnership. Stracke remarked that Opel's new pricing strategy will not make the brand a rival for sister GM brand Chevrolet, since, according to him, customers do not see the brands as competitors.

Opel recently recently said that it is ready to guarantee German jobs until 2016 if labor unions agree on a deal to shut down its Bochum site once the production of the Zafira Tourer van ends. In the next several weeks, discussions will continue between the management of Opel and the IG Metall trade union and the German plants’ works council representatives.

The discussions will focus on reaching an agreement over job cuts, wages, producing a more extensive range of models, as well as a expanding deeper into export markets. Stracke has said in a statement that Opel has to work towards sustainable positive results for its operations in Germany.

He remarked that Opel has to make adjustments to its business to become profitable even when market conditions are difficult. Opel said that it doesn’t only want to slash costs as it also target to not be so dependent on imported vehicles and parts.

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