Opel will continue to look for new markets despite pulling out of Australia

Article by Anita Panait, on August 14, 2013

General Motor’s Opel unit is withdrawing from Australia just a year after launching sales in the country, but assured that it will continue to look for new markets outside Europe. According to Opel, it will wind down its sales network in Australia "immediately." Opel commenced sales of its Corsa subcompact, Astra compact and Insignia mid-sized cars in Australia in August 2012.

The carmaker cited tough competition and high cost of building brand awareness as reasons for pulling out of the Australian car market. According to a spokesman for Opel, the brand couldn't keep up with discounts offered by competition.

The spokesman told Automotive News Europe that Opel Australia would “need to follow recent competitor price reductions, and significantly reposition the price of its core volume models." He remarked that coupled with the marketing investment, trimming car prices further was "not financially viable for any of the parties involved."

He, however, remarked that GM's Holden brand could sell rebranded Opels in the future. He added that Opel will still proceed with its export strategy, and is looking into new markets “wherever it makes business sense” for the GM brand.

He said that Opel’s 2011 launch in Israel was a success, with expectations to 5,000 cars in the country this year. Opel is aiming to hike its vehicle sales outside Europe as part of its efforts to trim its excess site capacity as well as reduce losses caused by slumping sales in Europe. GM's European operations – made up of Opel and UK sister brand Vauxhall – have incurred $18 billion (EUR13.6 billion) in losses since 1999, including $1.8 billion in 2012.

Opel created the post of executive director of international operations in 2010 in a bid to grow new business outside Europe. The brand targets countries China, South America, Australia and South Africa. Opel launched sales in in Chile, Singapore and Australia in 2012; and in the United Arab Emirates this year.

In July, it was announced by GM that it is shifting a large part of the production of the new Mokka subcompact SUV from South Korea to Spain. The Zaragoza plant currently produces the opel Corsa compact and Meriva compact van, which are suffering from dropping demand.

Opel unit has already received around 110,000 orders from Europe for the Mokka since its launch in June 2012. Opel will start output of the Mokka at its Zaragoza site in Spain in the second half of 2014. The shift is expected to help the Zaragoza site achieve full production capacity as well as protect its 5,800-strong workforce. [source: automotive news - sub. required]

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