In the latest effort to push up its European operations, General Motors will drop the Chevrolet brand in Europe by end of 2015, and focus its resources instead on pushing its Opel and Vauxhall brands.
GM will end Chevy sales in the region by the end of 2015, while maintaining the division’s presence in Russia, Steve Girsky, GM’s vice chairman, said on a conference call. Reorganization costs from the shift will total $700 million to $1 billion, with most of the charges posted in the current quarter and the first half of 2014.
“We have growing confidence in the Opel and Vauxhall brands in Europe. We are focusing our resources in mainstream Europe,” Stephen J. Girsky, Vice Chairman at General Motors, said on a call with journalists on Thursday.
The company’s Chevrolet brand will no longer have a mainstream presence in Western and Eastern Europe, largely due to a challenging business model and the difficult economic situation in Europe, General Motors said.
“This is a win for all of our brands here in Europe and around the globe as GM will benefit from a stronger Opel/Vauxhall,” Girsky said. To pull Chevrolet out of Europe “will help us to accelerate progress in the region.”
“Basically (we will) shut away the 1 % share company in Europe. The financial results have been unacceptable,” he said, referring to Chevrolet’s market share in Europe.
Thomas Sedran, President of Chevrolet Europe, said, “Chevrolet’s business results have been impacted by the unfavorable economic environment in Europe.”
Chevrolet deliveries in Europe dropped 17 % in the 10 months through October, giving the nameplate around 1.2 % of the market. Ruesselsheim, Germany-based Opel and its sister U.K. division Vauxhall posted a 3 percent decline in the period, about matching the industrywide contraction, giving the two a combined regional market share of 6.7 %.
Some of the brand’s “iconic” models, such as the Corvette, will remain on sale in Europe, and the up-market Cadillac brand is working on an expansion in the region in the next three years.
The carmaker’s South Korean operations, which produced most Chevrolet vehicles sold in Europe, will focus on “driving profitability, managing costs and maximizing sales opportunities.”
Via Reuters, Bloomberg