GM will kill the Chevrolet brand in Europe to save the German Opel

General Motors will drop its Chevrolet brand in Europe by the end of 2015, GM Vice Chairman Steve Girsky said today.

GM will kill the Chevrolet brand in Europe to save the German Opel

The move is the latest effort by GM to turn around its European operations and to focus its resources on reviving the Opel brand.

Chevrolet will no longer have a mainstream presence in western and eastern Europe due to a challenging business model and the difficult economic situation in Europe, GM said in a statement.

"We believe this is a win for all of our brands here in Europe and around the globe as GM will benefit from a stronger Opel/Vauxhall," Girsky said. To pull Chevrolet out of Europe "will help us to accelerate progress in the region," he said.

Chevrolet's annual sales in Europe have remained low at about 200,000 since GM relaunched the brand in the region in 2005. Chevrolet has focused on selling small cars such as the Aveo subcompact and Spark minicar built by GM Daewoo in Korea.

GM Daewoo produces most of the Chevrolet vehicles sold in Europe, exporting 186,000 vehicles to Europe last year, accounting for  over 20 percent of the unit's total vehicle output. "We will phase out exports to Europe by the end of 2015. We will discuss with the union how to enhance the operating efficiency of our plants," Park Hae-ho, a spokesman at GM Korea, said.

Chevrolet's deliveries in the EU and EFTA markets dropped 17 percent to 152,260 vehicles through October, giving the nameplate 1.2 percent of the market. Opel and its sister UK division, Vauxhall, posted a 3 percent decline to 718,829 units over that period for a 6.7 percent market share.

Opel clash

Hurt by a brutal downturn in European demand, Chevrolet has responded by slashing prices and introducing more upmarket models -- putting it on a collision course with Opel.

Thomas Sedran, Chevrolet Europe president, said: "Chevrolet's business results have been impacted by the unfavorable economic environment in Europe."

The Chevrolet distribution network in Europe totals about 1,900 dealers, and the company will “work with individual dealers” to determine their future, Sedran said. More than half of the outlets also handle Opel models.

Girsky said that by shutting Chevrolet GM expects to record net special charges of $700 million to $1 billion primarily in the fourth quarter of 2013 and continuing in the first half of 2014.

Author: AL
Source: Autolatest & Autonews

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