GM decided to give full support to its money-losing European unit, allowing Opel to come up with yet another restructuring plan – after deciding to retire from the region the Chevrolet brand.
After many years of losses and billions of dollars gone down the drain, the Adam Opel unit, with its two brands – Opel and Vauxhall – have a new target, to make their way back to profit by 2016 and then bring back by 2018 at least 5% of earnings before interest and taxes.
Opel CEO Karl-Thomas Neumann and his executive team came up with the plan, with the company leader saying the unit has the full support of the parent – US automaker General Motors. The plan is actually already revised, going down to a 2018 target from the previous 2022 date – all the while taking into account the realities of the European auto business, which is very competitive amidst the very slow return to normality.
By 2018, the plan calls for no less than 27 new models and 17 engines for the two brands, with the return to profitability by 2016 based on cost lowering, the improvement of capacity utilization at its production facilities and by boosting revenue.
Opel also aims to capture more market share in the European region, including Turkey and Russia, rising from the current 5.8% to 8% by 2022. In the home market of Germany, the brand aims to capture in the same time frame 10% of the market, up from 7.1%.