Analyses
22 mar 17

GM: less global, but better oriented without Opel

Before the PSA deal, General Motors had 3 focus zones in terms of volumes: North America, China and Europe. How does the Opel sale and thus exit from Europe fit into the group’s global strategy?

Obviously, rather than chasing the global sales crown, GM’s objective is now on becoming more profitable.

The technology that the European market demands in terms of fuel efficiency and powertrains in general is hardly of use to the rest of the world, limiting economies of scale and making Europe a tough cookie for global automotive groups such as GM. Still, they cannot afford to abandon the market altogether – many global corporations have their HQ on the Old Continent, which also makes an interesting proving ground for new technologies and services.

Niche premium presence
That might explain why GM holds on to its two exotic makes in Europe: Cadillac and Chevrolet. The former has no diesel engines or low CO2 powertrains in its line-up, lacks a strong brand awareness in Europe and therefore has an almost impossible job competing against the German premium trio Audi/BMW/Mercedes. The latter only ships Corvette and Camaros to its 40-odd European dealerships. Iconic? Yes. Lucrative? Doubtful.

GM allegedly sold 1,800 cars in Europe last year. "Marginal as this may be, having some presence is better than having no presence at all," asserts IHS Automotive senior analyst Stephanie Brinley (source: autoweek.com). "It doesn't have to be high-volume. It has to be profitable”.

Cadillac has to become a larger player in the global premium market. The U.S. and China are Cadillac’s volume makers, while the brand sees itself "as playing more of a boutique role in Europe - an alternative to the traditional luxury establishment", an e-mail statement to Automotive News reads.

Goodbye Opel, hello new mobility
Now that its money-draining European branch has been cut off, GM could actually consider launching new operations in the area – perhaps seeking partnerships with other automotive groups and focussing on electric mobility and connected services. It has the technology – the Chevrolet Bolt is the first affordable ‘family EV’ that yields a range of 238 miles.

Moreover, as from 2018, GM plans to put thousands of self-driving Bolts onto American roads together with its ride-sharing affiliate Lyft to test autonomous technology (source: fortune.com). If the company becomes a leader in autonomous vehicles, it would be logical to expect that there is a business case for GM in Europe, too.

Picture: Carlos Tavares, chairman of the Managing Board of PSA Group, and Mary Barra, chairman and chief executive officer of GM. 

Authored by: Steven Schoefs