The new Crossland X, which Opel is taking on tour around Europe this month, shares many characteristics found in the brand's other cars. The "floating roof" comes from the Adam, ergonomic seats are also found in the Insignia and the OnStar concierge service derives from parent General Motors. Engineers claim the crossover drives like a German car too, meaning it is stable in the curves without sacrificing comfort.
Underneath, however, the mechanical innards are all French. To save costs, essentially every part in the Crossland X that the customer doesn't see is shared with the new Citroen C3 Aircross. Not even the 1.6-liter diesels come from Opel.
If it's up to GM CEO Mary Barra, the Crossland X will mark a new beginning for Opel and its UK sister brand Vauxhall -- one without GM.
The U.S. carmaker looks to extricate itself from Europe by offloading its two brands onto Citroen's parent, the PSA Group. Immediately following the announcement that in 2016 it took a $257 million loss at Opel, this time on the back of Brexit-related currency headwinds, Barra voiced her frustration at yet another breakeven target GM's European arm failed to achieve. Despite nearly two decades of restructuring programs, cutbacks and plant closures, Opel remained mired in red ink. Meanwhile once-struggling rivals Ford of Europe and PSA have been able to return to profit.
"We're not satisfied with these results and the team is focused on mitigating the effects," Barra told investors last month, just days before it was revealed she and GM were in advanced talks with Opel's platform provider over a sale to the French parent. PSA Group CEO Carlos Tavares says the Crossland X is the blueprint for how the two companies can successfully work together, which he says they have been doing without any problems for four years. He believes those benefits would only expand from closer cooperation, something the two companies have been discussing since last November.
Tavares is confident PSA can make a difference. "We think we could help Opel because three years ago PSA was in a similar position," the CEO said. "Opel is ready to listen to us."
Another key factor pushing Opel toward PSA is that Europe's car market is expected to stagnate this year on the back of a forecast decline for UK sales due to uncertainty about the country’s exit from the EU, ensuring further losses for Opel this year. In addition, major elections are being held across the EU that could determine the fate of the single currency, especially if Marine Le Pen, who has said she would hold a referendum on whether to abandon the euro, is elected French President in May. An expected sales rebound in Russia this year also won't help because Opel pulled out of the market in 2015 to prevent further losses.
Forecaster IHS Markit highlighted late last month the harsh reality, saying the industry risk in mature markets is at the highest level it has been since the Lehman Brothers collapse in 2008, which helped spark the global economic crisis. "Political uncertainty could cause a significant rift in light vehicle sales both in the U.S. and Europe, as both regions are undergoing fluctuations in policy, leadership and other dynamics," said Henner Lehne, senior director, global vehicle group for IHS Markit.
Under that scenario, perhaps it is wise for GM not to have Opel, although the automaker balked at the chance to discard the brands eight years ago because management wanted to maintain a presence in Europe. When the U.S. automaker found itself insolvent in 2009 and unable to fund Opel, the subsidiary was put up for sale at the insistence of the German government. Once GM emerged financially strengthened from its pre-packaged bankruptcy, however, it called off the disposal. The uncertainty over Opel's future, however, left a permanent mark on the business.
When Opel CEO Karl-Thomas Neumann joined in March 2013, the year European new-car sales hit bottom, the GM subsidiary had just postponed yet another breakeven target after losses soared to $1.9 billion in the previous year. With Neumann in charge, GM agreed to fund 4 billion euros worth of investments through 2016. It even held its first board of directors meeting in Opel's German headquarters to demonstrate the parent's steadfast commitment.
In return Neumann pledged that by 2022 Opel would deliver an 8 percent European market share and an operating margin of 5 percent. The first test of that goal was attaining profitability last year. While Opel failed, it was a lot closer to making money than it had been in nearly two decades. Since Neumann joined four years ago, Opel managed to halt a market share slide it had suffered since European car sales peaked in 2007.
Key new models such as the Astra were winning important prizes, sales were slowly growing, and Opel’s once-disastrous image in Germany was on the mend, helped by ads that took advantage of Opel's underdog status.
Turning around a chronic money-loser such as Opel is no small feat. Whether it is Fritz Henderson, Carl-Peter Forster, Nick Reilly, Karl-Friedrich Stracke, Steve Girsky or Neumann – the list of executives that had their shot at making GM's European operations profitable is long. And all ultimately failed.
Said Tavares: "I have a high respect for the work that Neumann and his team did at Opel, but you cannot continue to lose money for more than a decade and burn 1 billion euros in cash each year." He added that he doesn't think you can plan the future if you do not manage to deliver results in the short term.
As talks continue about Opel's future without GM the company has started the biggest model offensive in its history, with seven launches this year that are expected to help it become Europe's second-largest automaker by sales next year, according to an IHS forecast. The new models include the revamped Insignia sedan as well as the Ampera-e, a purpose-built full-electric car with a certified range of more than 500 km.
Largely based on the Chevrolet Bolt, the Ampera-e beats Volkswagen brand's ID electric car to market by three years. Neumann is reportedly mapping out the transformation of Opel into an electric car brand. Perhaps that is why the otherwise Twitter-friendly CEO initially could only muster a tepid endorsement for the deal on social media: "In principle, an affiliation with PSA makes sense," he tweeted, even though he never once supported deeper ties with the French carmaker in the past when asked. Neumann this week tweeted that he had just had a "long and very constructive conversation" with Tavares.
Tavares believes the combined entity could sell 5 million units a year in the midterm and reach a profitability level close to PSA's current target, which is a 6 percent margin. "There is an opportunity to create a European car champion resulting from the combination of a French company and a German company with a strong UK brand," he said.
Luca Ciferri and Peter Sigal contributed to this report.