Finally, GM Realizes Europeans (and Others) Like to Buy German Products, Especially Cars

While in business school, together with 5 other students and the dean, I was given the opportunity to have lunch with GM's then-CEO Jack Smith (GM CEO between 1992 and 2000), and I asked him why GM wasn't using its German brand better. I brought up an example from Japan – where I had lived up until a few months earlier and where GM was actively promoting its full-size vans at the time. Sales of these absurdly large, gas guzzling, and dubious reliable vehicles must have been negligible. I never saw one on the roads. I suggested GM leverage Opel, which already is the right size for the market. Jack Smith's response was a political, "We are reviewing our product mix in the different markets." My immediate thought was something to the effect of, “Yes, hello Sherlock, please do that.”

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This conversation took place toward the end of 1996. Now, 18 years later, GM appears to have concluded its product mix review, and the newly appointed GM president has spoken. The following is from a Nov. 11 article in The Wall Street Journal:

"​WSJ: Where has GM taken money off the table?

Mr. Ammann: It was the decision that we made to take the Chevrolet brand effectively out of Europe. It became very clear that if our goal was to win in Europe we were spreading our resources too thinly between Chevrolet and our German Opel brand. We decided that we needed to make one bet and we chose Opel.​"​

Finally! Opels are well-made cars, with German-build quality and with engines, other options and general reputation that should work well for GM in Europe. When I grew up in Sweden, we thought of them as comparable with Volvo, SAAB, Audi, German Ford, etc., although a notch or two below BMW, Mercedes and relative exotics (then anyway) like Porsche. These days, the Opel products are strongest among the smaller cars - like the Opel Corsa, although there is quite a range in its lineup. If you enjoy the British TV show Top Gear, you will see Opel products featured, but with a Vauxhall badge. Check it out on Netflix.

Good decision, GM – I think this is a smart move. Just like you are getting traction with Buick (!) in China, not all markets are enamored with the main GM/Chevy labels.

Voices (3)

  1. Thomas Kase:

    For b+t as well as any Top Gear fans out there, this is what they said recently about the Chevy Cruze:

    “Still on sale albeit departing, head bowed. A disastrous attempt to hoodwink Europeans into thinking it would suffice as a mainstream car when it’s actually crude and backward, forcing GM into a brand strategy that pushed the Vauxhall Astra up in price to a place it could never comfortably perch. This misjudgement didn’t only break Chevy in Europe, but was on course to badly harm Vauxhall-Opel too. It’s a once-in-a-lifetime bad car/bad business case synergy of awful.”

    From this URL: http://www.topgear.com/uk/photos/The-worst-cars-you-can-buy-right-now-2014-10-09?imageNo=1

  2. Thomas Kase:

    b+t: I’ve never been a proponent of GM vehicles on an absolute level, but you have to commend them for finally realizing that Opel is a better vehicle than anything Chevy has. Sure, it’s not a top flight German brand, but better than what is built in the US.
    GM Korea is a separate story – and the Opels I referenced above (like the popular Opel Corsa) aren’t built in Korea. Maybe you’re thinking of “fun” cars like the Suzuki/Holden/Daewoo/Chevy Cruze? Eeek.
    Yep, sometimes it sure looks like GM will do anything in their power to avoid building decent cars.

  3. bitter and twisted:

    Slapping a Chevrolet badge on second-rate korean cars and hoping for the best was a dumb idea, but the core problem is GM Europe are in decline and their cars are generally mediocre.

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