Why the Chevy-Opel crisis in Europe sounds so familiar

Automotive News | July 17, 2012 - 2:14 pm EST

General Motors flipped back into another Opel crisis last week with the abrupt departure of Karl-Friedrich Stracke as CEO of the German subsidiary. And today GM named Thomas Sedran, a former AlixPartners restructuring consultant, as interim CEO.

The personnel moves may have been surprising, but there was a clear signal of trouble three weeks ago. At the Automotive News Europe Congress, Stracke said GM had moved Opel upmarket too quickly. In the future, he said, Opel will be a brand more buyers can afford, aimed at its traditional customers.

Taken in isolation, the move might make sense. But nothing in the GM empire exists in isolation.

In Europe, GM has been trying painstakingly to define separate market space for Opel and Chevrolet, whose cars share many components.

Their formula? Opel would move upscale to do battle with traditional rival Volkswagen, while Chevrolet targeted the value niche. This suits Chevy, which is transitioning away from the bargain-basement image it got when GM started slapping the bowtie on Daewoo cars in Europe.

At the Frankfurt auto show last September, Stracke endorsed the policy for Opel, saying "We want to differentiate it very clearly from the Chevrolet brand in Europe."

Now that strategy seems to be kaput. Meanwhile, Chevrolet sold 85,501 vehicles in Europe during the first five months of this year -- more than 20 percent of Opel/Vauxhall's total of 377,187.

So it appears that GM will have two overlapping brands in Europe. The spin, I guess, will be that Chevy's American identity will distinguish it from Opel, attracting a buyer with a different mind-set than an Opel buyer. Never mind the striking similarities between the two brands' vehicles.

You can be forgiven for thinking you've heard this before -- because you have. It's strikingly reminiscent of the tortured psychographic/demographic/brand DNA rationales that GM executives used to concoct in the United States to explain why there was really no overlap between Chevrolet, Pontiac, Buick, Saturn and Oldsmobile.

Dave Guilford is enterprise editor of Automotive News.Dave Guilford is enterprise editor of Automotive News.

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