GoAutoLogo
MENU

News - Opel

Opel eyes 15,000 sales

Spicy: The Astra GTC Coupe was revealed in final production form at Frankfurt.

Oz to be a key plank in Opel’s global expansion with 15,000 sales forecast by 2015

Opel logo15 Sep 2011

OPEL expects to exceed the combined total sales of Renault, Peugeot, Citroen, Skoda and Fiat in Australia last year by selling at least 15,000 cars a year here by 2015.

The ambitious sales target for Australia, where General Motors will reintroduce the German brand after an official launch at next October’s Sydney motor show, was revealed to Australian journalists at this week’s Frankfurt motor show by GM Europe CEO Karl-Friedrich Stracke.

“It’s 15,000 to start from and then we want to go from there,” said Mr Stracke when asked how many vehicle sales he expected from Australia.

He said the target was realistic given Opel had sold 5000 vehicles in another key export market, Israel, after launching there in January this year, but admitted that lack of brand recognition would be Opel’s biggest hurdle Down Under.

“15,000 in the first three to four years, but it depends on the reputation of the brand and what we do with it,” he said. “We won’t do 15,000 in the first year … but maybe after three years we will do 15,000.”

Put into perspective, last year Renault sold 1900 cars in Australia, where it has been represented on and off for 60 years, and where it launched for the sixth time with a $60 million budget in 2001, when it revealed a long-term target of 20,000 annual sales. Renault’s best Australian sales year since then was 4565 in 2002.

Peugeot vehicles have been sold here sporadically since the early 1900s and continuously since 1949, but last year just 5650 Australians bought a Peugeot. Citroen has been represented in Australia for 85 years but the French brand sold just 1600 vehicles in 2010.

 center imageLeft: Opel Australia managing director Bill Mott. Below: Corsa, Insignia, EV two-seater, Zafira Tourer.

GM Europe’s vice-president international operations and former Holden chief Chris Gubbey dismissed parallels between Opel and Renault, saying: “There is a strong recognition in Australia about German brands and German engineering. I think we have quite significantly different positioning than Renault in Australia, so our confidence levels are significantly different.”

When passenger cars from renowned Italian brand Fiat were reintroduced to Australia in 2006, the European car-maker said 5000 annual sales were required by 2010 for the exercise to have been deemed a success. Last year Fiat shifted only 1363 vehicles here last year – mostly commercials.

Volkswagen relaunched its little-known Czech brand Skoda here in 2007after an absence of 25 years and last year the growing range of cut-priced models attracted 1652 buyers.

Meantime, Opel’s prime target – Volkswagen – notched up a record 38,000 sales in 2010 and should easily eclipse that by launching no fewer than 13 new or facelifted models.

For Opel to achieve 15,000 annual sales it would have to approach VW’s sales levels with its Polo, Golf and Passat, which together accounted for more than 20,000 sales last year.

Opel has its own ambitious growth strategy, announcing in Frankfurt that it will spend 11 billion Euros over the next three years to release 30 new models by 2014.

Despite launching here next year with just three key core models – Corsa, Astra and Insignia – Mr Stracke said Australia would play a small but significant role in Opel’s global expansion strategy, which calls for 1.4 million sales worldwide in 2012 (up 100,000 on last year), including at least 100,000 exports – up from just 30,000 this year.

“Right now we’re rather small in exports,” said Mr Stracke. “Of the 1.3 million units we want to sell this year there will be 30,000, so it’s a rather small amount and we want to grow that and that’s why we are exporting to Australia and other countries.

“We want to grow the business. Next year we want to be at 1.4 (million sales), so want to grow by 100,000 units in one year. It’s an important proportion of our growth. We will grow that (export) business continually.”

Neither GM Europe executive would be drawn on which additional Opel models would join the initial launch range, which will comprise petrol-powered versions of the light-sized Corsa three-door and five-door hatchback, five-door hatch and wagon versions of the Astra small car (to be available with both petrol and diesel engines), and petrol/diesel-powered sedan and wagon derivatives of the mid-size Insignia.

Either the compact Meriva people-mover or redesigned Zafira Tourer are likely to eventually join the local Opel line-up, which is currently in the ADR homologation process, but if the German brand’s new-generation Combo van arrives here it will continue to wear a Holden badge.

Potentially adding some spice to the range are the Astra GTC Coupe revealed in final production form at Frankfurt and higher-performance OPC versions of all four models.

Opel’s version of the Chevrolet Volt plug-in hybrid that GM plans to sell here as a Holden next year, the Ampera, has been ruled out for Australia in this generation, but on the table for Opel in Australia are next year’s all-new ‘Junior’ sub-light hatch, an upcoming Corsa-based compact SUV and all-new coupe and convertible sportscars due to appear in 2013.

Asked which of the 30 new products Opel will release in Europe over the next three years are likely candidates for Australia, Mr Stracke said: “I leave it up to the team here to decide on a business case basis. There is no product which we would not send over if the business case makes sense.

“I want to see a product line there for Opel, not just pick this and this and not this or whatever. You need a brand and to support the whole product line-up. But there are some for sure priorities for Australia which is more what the Australian customers are looking for so we would prefer them first.”

Asked if Opel could achieve 15,000 annual sales in Australia with just three core models, Mr Gubbey said: “Fundamentally we should. I think there are probably one or two additions along the way, but that’s too much depth to go into today.

“It’s a matter of priorities and then as the business grows then we get the opportunity to grow the portfolio with it. If we try to throw everything at once then the business is going to struggle. We’ve got to focus on building the whole business then expand as the opportunity comes.”

Newly announced Opel Australia managing director Bill Mott admits the German brand’s lack of recognition here will mean it has a long way to go before it becomes Australia’s second-largest mainstream European brand behind Volkswagen.

“We did some low-level clinics with the products we’re bringing – Astra and insignia,” he revealed. “We asked people what Opel means to them and the result was basically a blank slate – people don’t know anything about Opel.

“So it’s both a challenge and an opportunity to establish Opel in Australia.”

Opel has not revealed the extent of its national dealer network, but says it will be represented in Australia by a number of retail outlets in at least each capital city, including both current Holden and non-Holden dealers.

“The priority is the best dealers,” said Mr Mott. “There has been lots of interest – not necessarily just from Holden dealers.”

Mr Gubbey said: “It’s more a case of not excluding Holden dealers. It’s not an either-or target. It’s a matter of choosing the right dealerships that have the right locations in the cities that we want to go into. It’s not an exclusive approach.”

To directly target Volkswagen and avoid substituting sales from Holden, Opel is expected to position its models somewhere between their rivals from both brands, with the Corsa priced above the Barina but below the Polo, the Astra priced higher than the Cruze but lower than the equivalent Golf and the Insignia costing more than the upcoming Malibu but less than the Passat.

Exactly how much lower than VW’s prices Opel is prepared to go remains unknown.

“In terms of positioning obviously it’s not targeting the same customer base, so we’re pushing more towards the European brands sort of not to tread over on Holden’s space,” said Mr Gubbey.

“The products are differentiated of course as well. We clearly position ourselves as targeting different customer bases. Obviously it’s no advantage for us to go in and poach Holden customers and there’s no intent to do that.”

Mr Stracke said Opel’s model pricing strategy was decided on a market-by-market basis.

“We are pricing over VW already in the UK market already,” he said. “There are some markets like Germany where we are two to three per cent below VW in terms of pricing. It’s an important question because it always depends on your market reputation.

“We have a good reputation in many markets today … the lowest in the past was in Germany. That was due to the very negative communication about all the restructuring. This is now over and we have very good news to say right now.

“Australia is a very important market and we will see how quickly we can ramp up. There is some potential for us to basically position Opel in addition to Holden in Australia. It is a good play. Both brands have some history in Australia – Holden anyhow, Opel also.”

Mr Stracke said Opel, which has been part of the GM family since 1928 and will remain so after GM dropped plans to sell its European affiliate as part of a restructuring plan before it filed for Chapter 11 bankruptcy in 2009, would post an operating profit in 2011. GM lost $US1.6 billion in Europe last year and a total of $US14.5 billion in Europe since 1999.

“I think we are very pleased to say that in the first half of this year we were returning back in to the black from an operational profit point of view, so since years we have lost money in the European market and now we turned this around as we restructured the company,” he said.

“I can say that for the first time for years we are really in the black and we are positive that we can keep that position until the end of the year, so the operational objective is to stay in the black.

For next year we think it’s still realistic to say we’ll still have an operational profit.

“We have a very good cash flow situation as well, and we’re still investing a significant amount of funds in the business to support our portfolio launch.

“We have lots of new products coming. We will invest 11 billion euros in the next three years and getting 30 new products out with that. So that is what we want to do support the brand and to revitalise the reputation of the brand.”

Mr Stracke dismissed parallels with GM’s failed attempt to launch Cadillac in Australia two years ago and said Opel was committed to Australia for the long-term.

“I feel very committed to do this,” he said. “We need to have a long-term plan here. You do commitment to dealers and the sales organisation – this is a long-term commitment.

“We want long-term commitments obviously. When we get to Australia, we want to do this in a sustainable way.

“Not just looking for a year or two or for five years, but long-term.When we now do this Australian export this is obviously decided in the board with (GM chairman and CEO) Dan Akerson. It is clearly linked into the global brand strategy.”

Read more

Click to share

Click below to follow us on
Facebook  Twitter  Instagram

Opel articles

Motor industry news

GoAutoNews is Australia’s number one automotive industry journal covering the latest news, future and new model releases, market trends, industry personnel movements, and international events.