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Opel wins praise for dealer settlements

Consultative: Dealers have applauded the way Opel has handled its premature exit from Australia.

Class action avoided as Opel offers dealers $40m est. in compensation for pull-out

15 Oct 2013

AUSTRALIA’S 22 Opel dealers have praised Opel Australia management for their handling of compensation claims following the premature closing down of the brand within just a year of launch.

Dealers, who were outraged that their investments were being trashed just a year into sales of the brand, were gearing up for a major class action.

Many dealers’ claims amounted to between $2 million and $3 million, including investments in new dealership premises exclusively designed for Opel at Opel’s insistence.

But Opel dealers contacted by GoAuto have heaped praise on the company and its managing director Bill Mott. The company has offered an estimated $40 million or more to its dealer group as compensation.

One dealer said: “I think the way it was resolved is unprecedented. There is no other car company that would have done what they did. But I think if they had not done it that way they would have been facing a class action. I think they knew that.

“Having said that, a message needs to be flagged to all manufacturers that this was a disgrace and that it should never happen again,” he said.

Another dealer said that car retailers would now think twice before taking on new franchises that insist on very strict premises rules before the brand has proven itself in the market.

The various settlements included covering trading losses made in getting sales momentum for the brand, handing over the service tools and spare parts at no cost, allowing dealers to hand back cars to clear their floor plan finance accounts for Opel stock and generous compensation of premises costs which covered most or all the cost of the buildings, furniture, signage and fittings.

Dealers were also offered stock still held by Opel at an average trading bonus of $7000 a car although not all dealers participated in that offer. It is understood that Opel is still holding 700 cars on its own account and that steps are being taken to begin trickling these cars through Holden dealerships.

Holden dealers who were not awarded the Opel franchise are now being encouraged to take on the parts and service support for Opel car owners.

Dealers said the process was handled “delicately” and was “consultative”. But they described the pullout after such a short time as a “disaster that will trash the Opel brand for years to come and make it harder for Holden dealers to sell Opel-sourced products in the future”.

Another dealer said: “I think it is important to send a really clear message that the reason it did not turn to mush is because of the way it was handled.

“But I can tell you that there were very strong moves to take class action and others need to realise that it if it happens again – and you would hope that this would never ever happen again – that the franchise will face a very strong backlash from its dealers. The message must be that you cannot just walk away.”

There is now a concern that some of the Opel dealership premises could be lost to retail, commercial or residential developments. Opel dealers are saying that they are being approached by various car brands but these are mainly “minnow importers” with very little prospect of generating significant returns on the premises.

Some dealers are now looking for returns from their properties from outside car retailing.

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