General Motors has been losing money for years with its Opel/Vauxhall unit, but finally the division’s CEO, Karl-Thomas Neumann has high hopes the company would finally hit its target and stop the drain by 2016.
The chief executive is confident of the goal’s viability even as growth has once again slowed in Europe and the Russian market – Opel’s third largest – is hit by a huge downturn.
“Breakeven is a great thing, it’s a huge step,” comments Neumann. “But if we always break even, I think that wouldn’t be too exciting for investors. It will take a long time until Europe returns to pre-crisis levels and the Russian market could still go down,” he added.
There are numerous obstacles: most forecasters predicted the overall European market would grow faster than the current 2%, and Russia, a huge market has been hit by a slumping currency and the political crisis in Ukraine.
On the other hand, Opel’s boss expects the make to secure more market share as he pushes towards new segments (where it wants to compensate the disappearance of Chevrolet). It would also make economies by increasing scale and more often using GM’s global platforms, reducing parts and labor derived costs as it mulls a 5% pretax profit by 2022.
Via Automotive News Europe