GM CEO believes Opel getting ready to enter next phase of recovery image

General Motors decided three years ago that one of its most important steps after coming out of the bankruptcy reorganization process is to make sure its European unit would stop bleeding money.

The largest US automaker and the third biggest in the world wanted back then to see the losses pared by mid decade on the European continent, with the local division responsible for the egress of at least $18 billion across the parent company’s bottom line during the past 16 years. The Gm executives have now expressed confidence that although later the first envisioned, the breakthrough would finally be made in 2016. From that point onwards, the company’s strategy is to have Opel – which has remained the main brand (alongside British sister Vauxhall) in the region following Chevrolet’s retreat – grow its continental market share from 6.7 percent today to 8 percent by 2022. GM chief executive officer Mary Barra also says that jump in market share – which would also imply higher sales – would not come at a negative cost. “You need to be present in Europe. You need to win in Europe,” Barra commented recently. “Our investment in Opel reflects that.” The parent company forecasts Opel’s pretax profit margin without onetime items would reach five percent during the period.

But analysts and industry experts remain reserved as to Opel’s growth prospects, with IHS Automotive believeing Opel’s market share to remain the same during the period or even retread a tad because of higher competition with its German peers Volkswagen and Ford. The experts believe the mass-market brands are being pressured today both from below – from marquees such as Skoda or Dacia – and from above as luxury automakers try to win more customers.

Via Automotive News Europe