GM Europe: fails to break even in 2011, targeting one-billion Euro profit in 2016
Opel introduces New Zafira Tourer and premium minicar; Chevrolet introduces New Malibu
With the objective of breaking even (EBIT before restructuring charges) in GM Europe by 2011, GM has been pressing ahead with its restructuring plan including a 20% reduction of production capacity of its subsidiary in Europe, Opel/Vauxhall. In November 2011, however, the company announced that it would not be able to break even in 2011 due to a slumping economy in Europe. It will further update its lineup and reduce costs in the future, aiming to move into the black earlier.
Opel/Vauxhall says that it would introduce 30 new models and models that will be face lifted by 2014 and will secure a profit of 1 billion Euros, profit margin on sales of 5%, and a marketshare of 8.5% (6.2% in 2010) in Europe in 2016.
Concerning the Chevrolet brand, GM aims to boost the segment-coverage ratio in Europe and to almost double the sales volume in Europe to 1 million in 2016. The company plans to boost the marketshare in Europe from 2.5% in 2010 to 4-5% in the medium run.
|Related Reports:||GM Europe (December 2010), GM in China (1：August 2011)/(2：August 2011)
SAIC Motor (July 2011), GM (March 2011)
Model plan: GM Europe positions Opel brand up-market and Chevrolet as entry-level brand
GM Europe says that, in order to boost sales in Europe, it needs to differentiate the Opel/Vauxhall brand and the Chevrolet brand. In recent years, the sales volume of Chevrolet models increased to about 500,000 in Europe. In order to avoid the competition of the two brands, both of which are regarded as a value brand, GM intends to move the Opel/Vauxhall brand up-market to compete with Volkswagen, and, on the other hand, to position the Chevrolet brand as the entry-level brand.
In 2012, Opel/Vauxhall will launch a premium minicar, whose code name is the Junior, and the Mokka subcompact SUV, which is a sister model of the Buick Encore. In addition, it is planning to introduce models such as the New Zafira Tourer 7-seat minivan and the New Combo, which is available in a passenger car and commercial vehicle version and which Fiat supplies on an OEM basis.
Chevrolet introduced multiple new models in 2011 and increased the segment-coverage ratio in Europe from around 30% to 50%. In 2012, the company will launch the New Malibu midsize sedan, saying that it would cover two thirds of the entire segment in the future. Reportedly, GM plans to transfer Chevrolet's marketing operations in Europe to the GMIO (General Motors International Operations) at the beginning of 2012.
GM Europe's model plan (2011-2013)
|Opel||Ampera||End of 2011||The Ampera is an Opel version 5-door hatchback PHV, Chevrolet Volt, with a slightly-modified exterior. The model can run 40-80km in an EV mode. When the gasoline engine is used, the cruising range is up to 500km. The 2012 sales target is 10,000. GM's Hamtramck plant in the US produces it, exporting it to Europe.|
|New Zafira Tourer||Jan. 2012||The New Zafira Tourer is a third-generation 7-seat high-end minivan. The model has a seat arrangement called the Flex7; the three separate seats in the second row can be moved individually. It comes with progressive safety equipment including Traffic Sign Recognition, Side Blind Spot Alert, and Collision Mitigating Braking.|
|New Combo||Feb. 2012||The New Combo is a third-generation compact van that is available in a passenger car and commercial vehicle version. Beginning with this third-generation model, Fiat supplies the Doblo on an OEM basis. Fiat produces it at a plant in Turkey under Tofas, its joint venture company, with plans to supply 6,000 units in the first year.|
|minicar||First half of 2012||The model is a new minicar whose code name is the Junior. Opel calls it a lifestyle model and targets the generation that freely manipulates digital devices such as the iPod. The body of the model is compact, but it is a premium model that aims to make the Opel brand into a high-end brand. The price of the model is planned to be higher than that of Opel's other compact cars.|
|Mokka||End of 2012||The Mokka is the first subcompact SUV from a German OEM. It sits below the Antara in the lineup. The model is Opel's version of the Buick Encore, which was unveiled at the 2012 Detroit Motor Show. Two types of gasoline engines and one diesel engine are available. The model is equipped with drive assist/safety equipment for high-end vehicles.|
|New Vivaro||2013||The New Vivaro is a light commercial vehicle that is co-developed with Renault (Renault's name: Trafic). They have decided to cooperate on the second-generation model, which Vauxhall's Luton plant in the UK will produce. The high-roof version will be produced at Renault's Sandouville plant in France.|
|New Corsa||2013||The Corsa is a compact hatchback. The Zaragoza plant in Spain is expected to produce the model.|
|Astra convertible||2013||The Astra convertible is a convertible that is based on the Astra compact car. The Gliwice plant in Poland is expected to produce the model.|
|Chevrolet||Orlando||Mar. 2011||The Orlando is a new model 7-seat family van. The model is a crossover-style van that has the comfort/ operability of a passenger car and a spacious interior.|
|New Aveo hatchback & sedan||Aug. 2011||The Aveo hatchback & sedan is a third-generation subcompact. The CO2 emission of a model with a 1.3L turbo diesel engine is 100g/km or less.|
|Cruze hatchback||Fall 2011||The Cruze hatchback is a 5-door hatchback that is developed based on the Cruze sedan. The model has a roof line similar to that of a coupe and a short front/rear overhang, boasting a dynamic style similar to a sedan. The capacity of the cargo space is about 400L.|
|Camaro coupe & convertible||Sep. 2011||The Camaro coupe & convertible is a sports car that was revived for the first time in about 10 years. The max. output, max. torque, and max. speed of a model with a 6.2L V8 engine plus MT is 432hp, 569Nm/4,600rpm, and 250km/h, respectively.|
|Volt||Nov. 2011||The Volt is a 5-door hatchback PHV (GM calls it extended-range EV). The model was launched in the US at the end of 2010. The selling price in Europe is 41,950 Euros (tax included). The sales target is 1,000-2,000 units per year.|
|New Malibu||2012||The New Malibu is a midsize sedan. The model is a flagship model under the Chevrolet brand. The current model is designed exclusively for North America, but the new model will be launched in the global market, including China and Europe. The European version comes with a 4-cylinder 2.0L gasoline engine/2.4L diesel engine in combination with MT or AT.|
|Source:||Opel Press Release 2011.3.24/2011.9.12/2011.9.13/2012.1.5, Chevrolet Europe Press Release 2011.8.23, Automotive News Europe 2011.11.7|
|(Note) In January 2012, GM announced that, since the Li-ion battery used in the Chevrolet Volt PHV could catch fire, it would develop a fix to the battery pack on about 8,000 units that it had sold in the US without charge. Upon this announcement, Opel decided to ship the Ampera, a sister car of the model, after it had implemented the same repair of the battery to enhance its safety. The company plans to begin full-scale shipment in February 2012.|
Production facilities: Constructing an engine plant with production capacity of 500,000/year in Hungary
GM Europe invested USD700 million in 2010 and USD200 million in the January-September period of 2011 in its restructuring plan including a 20% reduction of Opel/Vauxhall's production capacity and slashing about 8,000 job.
The Bochum plant in Germany will drastically reduce workforce while it will newly set up production facilities for the New Zafira Tourer. GM will build a new engine plant that is capable of producing 500,000 units per year in Hungary in order to produce fuel efficient engines. GM's powertrain engineering center in Torino, Italy will add three new test benches.
Opel/Vauxhall: plans to restructure the Bochum plant in Germany
|Opel/Vauxhall will improve efficiency at its Bochum plant in Germany, planning to secure a fixed number of employees into the future. Under the restructuring plan that was initiated at the beginning of 2010, the plant will reduce its workforce by 1,800 to 2,800. In 2010, 600 workers already left the plant. In 2011, 300 employees were transferred to the Russelsheim plant. The company is currently pressing ahead with further job cuts as it offers incentives for voluntary turnovers.|
|The company will invest 175 million Euros in the vehicle plant in order to set up new production facilities and will begin producing the New Zafira Tourer. It originally planned to close the transmission plant at the end of 2011, but will continue production until the end of 2013 with about 300 employees due to a strong demand for cars for export.|
Source: Opel Press Release 2011.6.1
Opel/Vauxhall: boosts production capacity of the Kaiserslautern engine plant in Germany
|Opel/Vauxhall boosted the production capacity of its Kaiserslautern engine plant in Germany, which produces diesel engines for the Astra and the Insignia, from 180,000 to 250,000 per year, because of the increased orders for the two models in the first half of 2011.|
Source: Opel Press Release 2011.7.6
Opel/Vauxhall: begins construction of a new engine plant in Hungary
|In April 2011, Opel/Vauxhall started the construction of a new engine plant on the same site of its Szentgotthard plant in Hungary. The investment is worth 500 million Euros. Operations will begin at the end of 2012. The company will employ 800 new workers. The production capacity in full operation is 500,000 units a year. The new plant plans to produce small/midsize gasoline engines and midsize diesel engines. All the engines meet Euro6 emission standards, which will enter into force in Europe in 2014.|
Source: Opel Press Release 2011.4.12
GM: invests 20 million Euros in its powertrain engineering center Torino in Italy
|GM will invest 20 million Euros in Powertrain Engineering Center Torino in Italy in the next four years (announced in July 2011). The Engineering Center is in charge of the development of the latest technology for diesel engines for GM's passenger cars worldwide, for diesel control system, for hybrid systems and for conventional powertrains. The Center already has 15 test benches, but, with this investment, will add three new test benches and will conduct simulation tests concerning climate and comfort.|
Source: GM Press Release 2011.7.15
GM Europe's production volume by plant (own plant)
|Belgium||Antwerp||Astra, Astra Twin Top||88,862||51,626|
|Russelsheim||Insignia, Buick brand models||146,847||177,542|
|Spain||Zaragoza||Corsa, Corsa Van, Meriva, Combo||339,565||380,203|
|UK||Ellesmere Port||Astra, Astra Van||80,130||106,288|
|Luton||Vivaro, Renault Trafic||54,207||72,565|
GM Europe's production volume by plant (other manufacturers' plant)
|Cerizay||Tigra Twin Top||3,200||-|
|Russia||St. Petersburg||Antara, Astra||36||6,854|
Source: Opel in Europe Facts & Figures 2010 (Note) St. Petersburg plant in Russia reports to GMIO (GM International Operations) since 2010.
GM Europe's engine/transmission production
Engine production by plant
Transmission production by plant
Source: Opel in Europe Facts & Figures 2010
Russia: GM boosts production capacity by 75% to 350,000, having opened a new engine plant in Uzbekistan
GM Europe is currently expanding sales in Russia in addition to Europe, and is targeting the doubling of its marketshare from 2.6% in 2011 to 5% within two or three years. In the January-September period of 2011, Opel/Vauxhall doubled sales volume year-on-year to 49,000 units in Russia. Sales volume of Chevrolet models increased by 57% to 127,000, ranked second following the Lada brand.
GM's activities for local production are active. GM will boost the combined production capacity in Russia of its own plant and a joint venture plant from 200,000 to 350,000 a year. In addition, the company will consign production of the New Chevrolet Aveo to GAZ starting in 2012. In Uzbekistan, it opened a new engine plant, currently producing fuel efficient engines.
GM: boosts production capacity in Russia from 200,000 to 350,000
|GM and the Russian Federal Ministry of Economic Development concluded a letter of agreement on the enhancement of GM's production capacity. In the next five years, GM will increase production capacity of its wholly-owned St. Petersburg plant to 230,000 a year and that of the Togliatti plant, which it jointly owns with AvtoVAZ, to 120,000 per year. The combined production capacity will increase from the current 200,000 a year to 350,000. The St. Petersburg plant plans to produce Opel models in addition to Chevrolet models.|
|Based on the agreement with the Russian government, GM will increase the local-content ratio of engines and transmissions to 30% and that of other parts to 60%, and will also enhance the R&D center that is in charge of product development for Russia. As a response to such investment in Russia, the Russian government lowers the import duties for GM's parts to be imported over eight years.|
Source: GM Press Release 2011.6.2
GM: consigns production of the New Aveo to Russia-based GAZ starting in mid 2012
|In February 2011, GM reached an agreement with Russia's major OEM, GAZ, on the consignment of production of the New Chevrolet Aveo compact car (sedan and hatchback). GAZ will produce 30,000 units a year at its Nizhniy Novgorod plant starting in the middle of 2012. GM will market the product, which the plant produces, in Russia.|
Source: GM Press Release 2011.2.1
GM: opens a new engine plant in Uzbekistan
|In November 2011, GM and UzAvtosanoat (Uzbekistan automotive industry public corporation) opened and started operations of an engine plant of a joint venture company, GM Powertrain Uzbekistan (owned 52% by GM), in Tashkent, which is the capital of Uzbekistan. The plant is capable of producing 225,000 units a year. It produces 1.2L and 1.5L fuel-efficient engines, supplying them to the Chevrolet Spark that is manufactured in Uzbekistan. The model is marketed in Uzbekistan and is also exported to Russia and CIS countries.|
Source: GM Press Release 2011.11.15
Sales volume: GM Europe increases sales volume by 6.7% to 1.319 million in January-September 2011, having an 8.8% share of the market in Europe
In the January-September period of 2011, GM Europe increased sales volume by 6.7% year-on-year to 1.319 million units. Its marketshare grew from 8.7% to 8.8%.
Among its brands, Opel/Vauxhall boosted sales volume by 6.5% to 938,000 as it was supported by strong sales of the Meriva and the Astra Sports Tourer. Chevrolet continued to enjoy favorable sales of compact cars such as the Spark and the Aveo, increasing sales by 8.9% to 379,000 units.
Opel/Vauxhall is expected to sell about 1.3 million units in 2011, of which about 20,000 are to be exported outside of Europe. It started exports to China and Israel. It will gradually begin exports to Australia, South Africa, Chile, and Argentina, targeting the export of 100,000 units in the long run.
GM Europe's sales volume by brand
|2005||2006||2007||2008||2009||2010||Jan.-Sep 2010||Jan.-Sep. 2011|
|Source: GM Financial Highlights Q4 2010/Q3 2011|
|(Note) 1.||Sales volume of GM Europe includes that in Western, Central, and Eastern Europe as well as that in Russia and CIS countries.|
|2.||Opel brand vehicles are sold under the Vauxhall brand in the UK.|
|3.||Sales of Saab vehicles are included up to February 2010. In 2009 or later, sales volume of Saab models is included in Others.|
GM Europe's market share by brand in Europe
|GM Europe total||9.2%||9.4%||9.3%||8.9%||8.8%|
Source: Opel in Europe Facts & Figures 2010, Chevrolet Europe Sales Highlights 2010 (Note) GM Europe's market share in Europe during Jan.-Sep. 2011 was 8.8%.
Business results: GM Europe increases sales by 19% in January-September 2011, posting a loss of USD580 million (before interest and tax)
In the January-September period of 2011, GM Europe increased net sales and revenue by 19.3% year-on-year to USD20.48 billion and improved EBIT from a loss of USD1.2 billion to a loss of USD580 million. The company minimized EBIT to a loss of USD390 million in the first quarter and registered a profit of USD100 million in the second quarter, but posted a loss of USD290 million in the third quarter again. This is mainly because the company suffered from slowdown in sales due to the slumping European economy and debt crisis.
GM planned to reach break even (EBIT before restructuring charges) for GM Europe in 2011, but gave up the plan in November 2011.
Opel/Vauxhall aims to move into the black at an early date in the future through the introduction of multiple new models and cost reduction. It targets post profits of 1 billion Euros and a profit margin on sales of 5% and to secure marketshare of 8.5% (6.2% in 2010) in Europe in 2016.
GM Europe's business results (2010-September 2011)
|(in millions of USD)|
|Europe (GME)||Net sales and revenue||24,076||5,461||6,044||5,657||6,870||7,459||6,151|
|(Reference) Entire GM||Net sales and revenue||135,592||31,476||33,174||34,060||36,194||39,373||36,719|
|Source: GM Financial Highlights Q4 2010/Q3 2011, GM 2010 Annual Report|
|(Note) 1.||Sales volume of GM Europe includes that of Chevrolet models, while Chevrolet's business results are not included in those of GM Europe (they are included in the GMIO division).|
|2.||In 2010, GM transferred the business results of some of the corporations in Russia and Uzbekistan from the GME division to the GMIO division.|
|3.||After GM emerged out of Chapter 11 bankruptcy, it started as the New GM on July 10, 2009. The pretax loss of GM Europe from January to July 9, 2009 is USD2,815 million. Concerning EBIT from July 10 to December, the company posted a loss of USD814 million.|
(Reference) Sales volume by model and by country
GM Europe's sales volume by model
|Jan.-Sep. 2010||Jan.-Sep. 2011|
Source: Opel in Europe Facts & Figures 2010, Chevrolet Europe Sales Highlights 2010 (Note) Data in January-September 2010 and in January-September 2011 are from Automotive News Europe. They cover only Western Europe.
Opel/Vauxhall's sales volume and market share by country (Europe)
|Country||2009||2010||(Reference)||Market share (2010)|
|Jan.-Nov. 2010||Jan.-Nov. 2011|
|Belgium & Luxembourg||46,081||45,431||40,931||43,788||6.8%|
|South East Europe||37,450||35,456||n.a.||n.a.||5.5%|
|Other Eastern Europe||372||309||n.a.||n.a.||0.1%|
Chevrolet's sales volume and market share by country (Europe)
|Country||2009||2010||(Reference)||Market share (2010)|
|Jan.-Nov. 2010||Jan.-Nov. 2011|
Source: Opel in Europe Facts & Figures 2010, Chevrolet Europe Sales Highlights 2010 (Note) Data in January-November 2010 and in January-November 2011 are from each country's automobile manufacturers association and other sources.
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