Opel to venture into budget cars as part of turnaround, wants to take on Dacia and Skoda

Article by Christian A., on July 25, 2014

Opel is planning to produce a range of entry-level cars to recapture budget customers who had owned Chevrolet units, a person privy with the matter told Reuters. The source said Opel, a unit of General Motors and a sister brand of Chevrolet, has been missing out the demand for value cars that has so far benefit Dacia and Skoda.

The source added that GM has been mulling a possibly entry into the Europe value segment, adding that management is currently seeking ways to expand the Opel range following several years of restructuring.

The move to offer entry level cars is part of a wider European overhaul aimed at turning over organizational responsibility for GM's brands in Europe to Opel Group GmbH, which was recently created with around 100 employees.

Opel Group will now take care of Chevrolet's operations in Russia as well as of Cadillac brand in Europe, according to a spokesman. In June, Opel chief executive Karl-Thomas Neumann remarked that the automaker was mulling a car designed to capture buyers of other value brands.

The Financial Times recently said that GM is planning to introduce a line of low-cost models. In October 2013, General Motors put its Russian operations back under the control of its European arm.

Two months later GM dropped the Chevrolet brand in Europe to focus on its Opel and Vauxhall brands.GM has made a turnaround of its European business a top priority after racking up some $18 billion in losses over the past 12 years.

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