GM Strengthens its European Brand Strategy
- Opel/Vauxhall to compete as GM's mainstream brands across Europe
- Chevrolet to focus on iconic products in Europe
- Cadillac to expand in Europe
DETROIT General Motors today announced plans to accelerate its
progress in Europe by bolstering its brands in the mainstream and
Beginning in 2016, GM will compete in Europe's volume markets under
its respected Opel and Vauxhall brands. The company's Chevrolet brand
will no longer have a mainstream presence in Western and Eastern
Europe, largely due to a challenging business model and the difficult
economic situation in Europe.
Chevrolet, the fourth-largest global automotive brand, will instead
tailor its presence to offering select iconic vehicles such as the
Corvette in Western and Eastern Europe, and will continue to have a
broad presence in Russia and the Commonwealth of Independent States.
This will improve the Opel and Vauxhall brands and reduce the market
complexity associated with having Opel and Chevrolet in Western and
Eastern Europe. In Russia and the CIS, the brands are clearly defined
and distinguished and, as a result, are more competitive within their
Cadillac, which is finalizing plans for expanding in the European
market, will enhance and expand its distribution network over the next
three years as it prepares for numerous product introductions.
"Europe is a key region for GM that will benefit from a stronger
Opel and Vauxhall and further emphasis on Cadillac," said GM
Chairman and CEO Dan Akerson. "For Chevrolet, it will allow us to
focus our investments where the opportunity for growth is
"This is a win for all four brands. It's especially positive for
car buyers throughout Europe, who will be able to purchase vehicles
from well-defined, vibrant GM brands," Akerson said.
Chevrolet will work closely with its dealer network in Western and
Eastern Europe to define future steps while ensuring it can honor
obligations to existing customers in the coming years.
"Our customers can rest assured that we will continue to provide
warranty, parts and services for their Chevrolet vehicles, and for
vehicles purchased between now and the end of 2015," said Thomas
Sedran, president and managing director of Chevrolet Europe. "We
want to thank our customers and dealers for their loyalty to the
Chevrolet brand here in Europe."
The majority of the Chevrolet portfolio sold in Western and Eastern
Europe is produced in South Korea. As a result, GM will increase its
focus on driving profitability, managing costs and maximizing sales
opportunities in its Korean operations as the company looks for new
ways to improve business results in the fast-changing and highly
competitive global business environment.
"We will continue to become more competitive in Korea," said
GM Korea President and CEO Sergio Rocha. "In doing so, we will
position ourselves for long-term competitiveness and sustainability in
the best interests of our employees, customers and stakeholders, while
remaining a significant contributor to GM's global business."
With the decision that Chevrolet will no longer have a mainstream
presence in Western and Eastern Europe, GM expects to record net
special charges of $700 million to $1 billion primarily in the fourth
quarter of 2013 and continuing through the first half of 2014. The
special charges include asset impairments, dealer restructuring, sales
incentives and severance-related costs, and will pave the way for
continued improvement in GM's European operations through the further
strengthening of the Opel and Vauxhall brands. Approximately $300
million of the net special charges will be non-cash expenses. In
addition, GM expects to incur restructuring costs related to these
actions that will not be treated as special charges, but will impact
GM International Operations earnings in 2014.