European models are both too diminutive to sell in major markets such as the U.S. or China and too expensive to compete pricewise in emerging economies such as Brazil and India. Importing small cars engineered for other markets likewise doesn't work, since customer demands are far higher.
Ford tried to latch onto the boom in subcompact crossovers in Europe by introducing its EcoSport from India only to find that a vehicle designed to survive the disastrous road conditions of the local economy flopped when introduced to the high-speed autobahns of Germany.
"Europe is not only an incredibly competitive and crowded market, it's also an incredibly complex market: 31 countries each with their own regulations and taxation regime," Kia Europe operations chief Michael Cole told Automotive News, fresh from unveiling the brand's next-generation Picanto mini-car here.
Questioned by European Union parliamentarians about the patchwork of car taxes, Finance Commissioner Pierre Moscovici admitted last March that the problem was a "source of high administrative burden for citizens," but past legislative proposals to fix this "did not obtain the required unanimous support of member states."
Financial reporting practices also differ: U.S. carmakers break out their results by region, creating instant yet often ugly transparency -- particularly when losses in Europe ballooned in 2013. Many companies, however, don't bother informing investors whether their operations in Europe are in the red, including potential Opel owner PSA Group. Volkswagen, for example, did away with regional accounting 10 years ago in favor of global results by brand, helping to conceal its chronic losses in North America.
"There are two ways of looking at the European market," said PwC Autofacts Global Lead Analyst Christoph Stuermer. "One is there's no growth and no margins, true, but the other perspective is cars are quite expensive here, so if you are looking at a revenue perspective, Europe is quite nice because -- however little margin you make -- you still make a lot of cash."
Both Opel and its suitor, PSA, have seen their brands come under heavy fire from rivals, watching their combined share of the European market shrink from 21.7 percent to 16.3 percent over the past decade. The two have been attacked from above by aspirational brands, hounded from below by value-driven competitors and even flanked from the side by other mainstream brands that aggressively targeted a chronic weakness of their product portfolios -- an absence of SUVs.
Luxury brands may be largely reluctant to move downmarket in the U.S., but in Europe, Opel Astra buyers are inundated with their choice of premium compacts. Audi went so far as to even sell the pint-sized A1 in Europe that can appeal to those originally shopping for an Opel Corsa or Adam. In the West European market, where transaction prices are the highest, both BMW and Mercedes-Benz have grown so fast that -- with some minor help from Mini and Smart -- they were actually able to outsell Opel last month.
Just as Mercedes and BMW push lower, upstart import brands such as Hyundai and Kia have built their reputations on smash-hit utility vehicles at a time when traditional European carmakers had nothing to offer. Sales of Kia's Sportage compact crossover rose by a third in Europe last year, nearly reaching 140,000 units, while Opel still has nothing to offer in such a crucial segment.