http://www.autonews.com/article/20170220/OEM/302209929/the-really-new-gm-ready-to-quit-europe
Opel sale would be a bold step, but is it the right move?
February 20, 2017 @ 12:01 am
Nick Bunkley
DETROIT -- After nearly two decades of losses in Europe, General Motors appears ready to all but abandon the continent in order to seek bigger payoffs with investments in autonomous vehicles and the more lucrative U.S. market instead.
It's a radical pivot for a company that historically tried to dominate every global market it could as well as a sign of how dramatically the industry is being upended by shifting attitudes about transportation.
GM has been in this spot before. But both the company and its circumstances are significantly different now. A 2009 deal to sell the Opel division -- born of desperation and ultimately canceled -- envisioned GM ultimately finding a way back in Europe through its surviving brands.
Today's GM works from a position of financial strength but with far less patience or sentimentality. Under CEO Mary Barra and President Dan Ammann, GM is proving that it's increasingly willing to walk away from declining segments and unprofitable markets -- even one as sprawling and influential as Europe -- so that it can pour more of its finite resources into advanced technology, high-margin SUVs, Cadillac and promising new revenue streams.
There are certain periods in running a big conglomerate like GM - that the CEO needs to think and act boldly and this is one of them.
There are going to be major upheavals forthcoming in the auto industry w/ automation and increased movement to non-traditional ICE powertrains, and in particular, diesels increasingly falling out of favor.
Sure, selling off Opel/Vauxhall will have some repercussions, but at the same time, it injects (a likely) $1B to GM's coffers (to continue investing in the areas which look to have a higher ROI) and stops any further bleeding from the European market.
Now, this doesn't mean that GM will be shut out of the Euro market forever.
Due to public health concerns, the tide is really starting to turn against diesels in Europe (a major reason why Toyota has been seeing good growth in Europe recently) and hybrids, PHEVs and EVs are starting to gain some real steam (for instance, the Kia Niro had 25k orders last year).
GM's core technology in this area lies w/ Chevrolet (in the Voltec powertrain and the EV system in the Bolt) - in which it would not be unfeasible for GM to give it another go in Europe w/ Chevy as a brand focused on alternatives to gas/diesel only powertrains (combined w/ increased automation).
VW makes little $$ for the VW Group with most of its profits coming from Audi and Porsche.
This is where Cadillac comes in (yes, I know, many of you are rolling your eyes).
Don't know how far Cadillac has gotten in terms of developing diesel powerplants for Europe (as Cadillac had stated), but if it isn't somewhat close to completion, they should just abandon it and instead, focus on utilizing the Voltec and EV powertrains for Cadillac.
Of course, Cadillac would need the right mix of product and proper execution of said product if they were to have any chance in making inroads into the European market (same goes for Chevy), but this challenge wouldn't be any more difficult than continually trying to turn a profit with Opel/Vauxhall and what GM would be doing w/ Chevy and Cadillac is what they would be doing anyway to future-proof themselves for the NA market, as well as China and other Asian markets where GM can make inroads.
Opel sale would be a bold step, but is it the right move?
February 20, 2017 @ 12:01 am
Nick Bunkley
DETROIT -- After nearly two decades of losses in Europe, General Motors appears ready to all but abandon the continent in order to seek bigger payoffs with investments in autonomous vehicles and the more lucrative U.S. market instead.
It's a radical pivot for a company that historically tried to dominate every global market it could as well as a sign of how dramatically the industry is being upended by shifting attitudes about transportation.
GM has been in this spot before. But both the company and its circumstances are significantly different now. A 2009 deal to sell the Opel division -- born of desperation and ultimately canceled -- envisioned GM ultimately finding a way back in Europe through its surviving brands.
Today's GM works from a position of financial strength but with far less patience or sentimentality. Under CEO Mary Barra and President Dan Ammann, GM is proving that it's increasingly willing to walk away from declining segments and unprofitable markets -- even one as sprawling and influential as Europe -- so that it can pour more of its finite resources into advanced technology, high-margin SUVs, Cadillac and promising new revenue streams.
There are certain periods in running a big conglomerate like GM - that the CEO needs to think and act boldly and this is one of them.
There are going to be major upheavals forthcoming in the auto industry w/ automation and increased movement to non-traditional ICE powertrains, and in particular, diesels increasingly falling out of favor.
Sure, selling off Opel/Vauxhall will have some repercussions, but at the same time, it injects (a likely) $1B to GM's coffers (to continue investing in the areas which look to have a higher ROI) and stops any further bleeding from the European market.
Now, this doesn't mean that GM will be shut out of the Euro market forever.
Due to public health concerns, the tide is really starting to turn against diesels in Europe (a major reason why Toyota has been seeing good growth in Europe recently) and hybrids, PHEVs and EVs are starting to gain some real steam (for instance, the Kia Niro had 25k orders last year).
GM's core technology in this area lies w/ Chevrolet (in the Voltec powertrain and the EV system in the Bolt) - in which it would not be unfeasible for GM to give it another go in Europe w/ Chevy as a brand focused on alternatives to gas/diesel only powertrains (combined w/ increased automation).
VW makes little $$ for the VW Group with most of its profits coming from Audi and Porsche.
This is where Cadillac comes in (yes, I know, many of you are rolling your eyes).
Don't know how far Cadillac has gotten in terms of developing diesel powerplants for Europe (as Cadillac had stated), but if it isn't somewhat close to completion, they should just abandon it and instead, focus on utilizing the Voltec and EV powertrains for Cadillac.
Of course, Cadillac would need the right mix of product and proper execution of said product if they were to have any chance in making inroads into the European market (same goes for Chevy), but this challenge wouldn't be any more difficult than continually trying to turn a profit with Opel/Vauxhall and what GM would be doing w/ Chevy and Cadillac is what they would be doing anyway to future-proof themselves for the NA market, as well as China and other Asian markets where GM can make inroads.