GM hails Opel dealership take-up in European turnaround plan

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FRANKFURT (Reuters) -- General Motors' European transformation is gathering pace, with the vast majority of its former Chevrolet dealers in the region now selling only Opel-branded vehicles to boost the once-flagging brand, the automaker said today.

GM mothballed Chevrolet in Europe last year to concentrate on ramping up the market share of Germany-based Opel-sold under the Vauxhall marque in Britain -- and bring an end to damaging in-house competition that had eroded the profitability of both brands.

"The dealer transition from Chevy to Opel is working extremely well -- 85 percent have converted to selling only Opel," the chief financial officer of the group's Opel division said.

In the past a customer walked in to a dealership looking for an Opel and ended up walking out with a Chevrolet, Michael Lohscheller explained, adding that Opel will be developing a range of models targeted at former Chevrolet buyers.

GM has made the turnaround of its European business a top priority after racking up $18 billion in losses over the past 12 years.

Bigger showrooms

"Opel showrooms will become bigger," Lohscheller said. "For us this is a really good opportunity to strengthen the Opel brand. We will try to capture customers who were in the low-price segment (of the market)."

Though sales in Russia appear to be at the mercy of an increasingly fragile economy as the Ukraine crisis rumbles on, Lohscheller said that GM remains "fully on track" to make its European operations profitable by "mid-decade," though he declined to clarify whether that meant next year.

GM had 1,900 Chevrolet dealers in Europe before abandoning the brand, though it still uses the Chevy brand in Russia.

Opel's market share in western Europe rose by 10.3 percent year-over-year to 7.6 percent in June, according to data from the Association of European Carmakers (ACEA), but Lohscheller said that new models will further help the brand to boost sales and profitability.

Volumes are expected to receive a boost with the launch of the next generation of the Opel Corsa, a model with annual sales of about 370,000, which is due to hit European showrooms at the end of the year.

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