RUESSELSHEIM, Germany -- Adam Opel, the German unit of the world's biggest carmaker General Motors Corp., said on Friday its operating loss ballooned to 384 million euros ($476.4 million) last year, hit by weak sales in poor market conditions.
The company, which has implemented a turnaround plan over the last three years aimed at returning to profit, also blamed currency effects, discounts on cars and the costs of consolidating its distribution network for the loss which compares to 227 million in euros 2002. Opel has said it aims to post a small operating profit in 2004 as cost cuts take effect. It would also be helped by the launch of its Astra car which will go head to head with Volkswagen's new Golf when it is launched in March.
Opel, which has suffered from a staid product range in a declining market in recent years, is pinning a good deal of its hopes for recovery on the Astra and has said it plans to roll out about 300,000 units this year.
The company, part of General Motors Europe which posted a $286 million loss in 2003, cut the working week for 5,500 employees at its main production site to 30 hours from 35 at the end of last year in a bid to reduce costs and avoid layoffs.
The company employs some 21,000 people in its home town of Ruesselsheim in western Germany, near Frankfurt.
Opel is not the only carmaker in Europe struggling to improve earnings. VW expects its operating profit to have more than halved in 2003 from the previous year and Ford Europe was hit by a deep loss earlier last year.
Most experts anticipate an improvement in conditions in western Europe this year and say auto demand should tick up about two percent after a 1.3 percent fall last year.