Opel’s slow walk into the history books, to join Panhard and Saab, has begun. It occurred just as I came to understand what Opel was about.
You can read the technical details here. The important and ominous part is this: “Tavares told his board that PSA would redevelop the core Opel lineup with its own technologies to achieve rapid savings, according to people with knowledge of the matter” (from AN Europe).
While I was reviewing the last generation Opel Astra, I noted that the description of the mechanicals differed little from its peers. So, you might say, where is the great loss? Even if you don’t care for Opel, its absorption into the PSA combine will reduce meaningful competition among the most important classes of cars.
Because different people design and make it, the Astra offers an alternative to the Focus and Golf. It actually is different so that if you care about driving, you will notice the Astra does things its own way. And that matters. Despite the fact big-ticket cars appear on the car magazines’ covers every month, what people buy are the cars in the Corsa and Astra classes.
These are the cars that people live with, that they buy. As soon as is possible, the Astra (if it has a future) will be made to differ from PSA’s Peugeot and Citroen equivalents in ways that are artificial. Remember how such a forced difference harmed Rover (v. BMW) and Lancia (v. Alfa Romeo). Yet, they will be similar because the underlying componentry will be the same. This is regrettable…
Just as I “get” Opel, I realise it will be taken away. Opel, in its current form, has found a set of values I rather like. I like the affordable prices, the style and the character – solid, well-engineered and comfortable. I really can’t imagine how PSA will keep Opel distinctive when there are not Opel engineers to achieve this aim by the simple fact that they are competitors.
Counterpoint: Nissan and Renault share platforms and nobody minds, you could say. Well, the firms have bases in Europe and Japan which helps. And Kia and Hyundai are paired. I’d agree that they seem to do okay but they are don’t offer a very big extra choice by their existence.
So, how soon will Opel vanish? If we take a look at the current range and then add eight years, we have some idea of how soon Opel will go the way of Talbot and Hillman, Humber and Sunbeam. It looks like a lot of the range will be gone by 2020 when the Opel Astra J cars finish up: the Astra Limousine, Cascada, Zafira and GTC; I’ve shortened the life of the Astra, as it were, because it’s an old platform already which dates from 2006. I can foresee Peugeot quickly doing an Opel spinoff of whatever they selling. Given the Peugeot 207 lasted six years, the 208 should last until 2018. So, that means the 2020 Corsa (if there is one will be paired with the 209.
I won’t go into a full model by model list. However, one sees that there are mismatches. Peugeot probably doesn’t need an Opel GTC or Opel Cascada partner for Peugeot’s equivalents (if they exist). The Astra Limousine is easy money for Opel since its existence is underwritten by the Chinese Excelle GT. Peugeot has no need of such a car though. The lovely Adam (its colourways deserve an award) will have no successor. Citroen’s mix and match DS cars probably serve the same market. The Comboo can go too as it is a rebadged Fiat from 2010.
The more one looks at the cars, there is little in Opel’s line-up that is not redundant or about to be replaced by a PSA clone. The upcoming Crosslanders already are. That leaves the Insignia Sports Tourer and Grand Tourer as the only items in the current portfolio that is unique to Opel that will not be gone by 2021. Its prospects aren’t that good either. The Peugeot 508 is nearing its end: it’s six years old now. Yet even if PSA bases the 509 on the Insignia, it will be a five year old platform by the time it is launched. So maybe the 509 will be badged an Opel in 2021 so as to phase out the 2017 Insignia.
I may very well be wrong in guessing PSA will discontinue the Opel brand. What is clear enough is that by 2025 the last “designed in Rüsselsheim” cars will be gone.
[On Thursday I was reminded that the Meriva has suicide rear doors. One happened to be in front of where I stood. They went to a lot of trouble to achieve that and it’s pretty overlooked.]
25 thoughts on “The Great Compression”
“I really can’t imagine how PSA will keep Opel distinctive when there are not Opel engineers to achieve this aim by the simple fact that they are competitors.”
With the proviso that details are scant-to-nonexistent, aren’t they taking over GM Europe wholesale, engineers and other staff included? I agree that management thereof will be key and that PSA approaches to key aspects will very likely drive down ‘Opellian’ influence, but that is not quite the same thing…
You’re quite optimistic. I’d say they could reduce Opel’s R&D by that amount related to body engineering. The character of a car is a holistic thing. That might explain Opel’s quietness which was required for Buick models. No, it’s the plank for many R&D people and not a few factories will closed. I am worried about Eisenach.
On a small point, the next 508 will, it seems, be a 508. With the last 308, it became apparent that Peugeot have now frozen their escalating model designation at 08, realising that having a zero in the centre is a crucial USP.
Could there be an “End of Days” thing going on here? I’m not sure if the good Protestant folk of Doubs Department are particularly superstitious, but once you reach -09, there’s nowhere else to go. In 2013 that was the way it was looking, with stories that the Peugeot family were ready to sell the car making part of the business to GM for a nominal sum, and concentrate their efforts on Faurecia and the pepper mills.
The carmaking side scraped through mainly thanks to Dongfeng. The motorcycle business came under Mahindra and Mahindra’s control in 2014.
Interesting you left out the one car that could put PSA at the forefront of the electric revolution, the Bolt/Ampera. This just could be ” the prize” for a company that’s been in bed with diesels for decades and nothing eco friendly projected.
The fact PSA experimented with air driven cars without success for a period shows they are interested in having a non combustion vehicle in their future plus this one product would give them a connection with GM in America for other opportunities.
I didn’t see it on the German web-page. I didn’t find it just now.
Note: I am bad at finding things.
But would GM grant them that techn0logy as part of the deal (which would either be building them under licence or importing them from the US and sticking on Opel badges) or would they keep it for themselves and add it to their Chevrolet range? I feel the latter is more likely.
I wouldn’t think exporting from America would be in tune with Trumps ideas and this may be another reason GM has decided to relinquish foreign production at this particular time in history. Built under licence would make logistical sense unless any deal included all inclusive rights to the technology.
Apparently PSA SHALL go to the electric ball:
“GM CEO Mary Barra will allow PSA to use the technology in the new Opel Ampera-e/Chevrolet Bolt long-range battery-powered cars under license in Europe, Manager Magazin said on Friday, citing sources familiar with the GM-PSA discussions.
Earlier this week the magazine said Opel CEO Karl-Thomas Neumann has been working on a strategy to turn Opel into an electric car only brand by 2030. It’s possible that PSA will put the plan into practice, the magazine said.”
That was on 17 February. Things could have changed, but EV technology must be high on the PSA must-haves, now the Mitsubishi are part of the Renault-Nissan axis.
I can see a plan which won’t go far: Opel goes electric. And then what? If e-car demand takes off Peugeot and Citroen will want in on the action.
Now that I view Opel as a brand in eclipse, all those cars on the streets seem less like living heritage now. I am a bit ticked off.
It makes me wonder which brands will still be going in 2027.
Do Lancia and Borgward stand a better chance than Opel?
I wouldn’t be surprised if Vauxhall outlives Opel under PSA. There are more Vauxhalls sold in the UK than Opels in Germany, and the UK brand has a loyal and uncritical following, particularly favouring the ancient Corsa and the previous Zafira.
That’s a shocking statistic. Is it true of Ford too? Opel’s a proper German firm. They employee thousands of people there. I’d like to know what sort of internal research Opel has on its brand perceptions.
2016 full year figures from best-selling-cars.com:
Ford don’t make any vehicles in the UK and haven’t for many years, GM make some Astras and Renault vans.
Do the customers know, or even care?
These are interesting figures. I often read that Germany is perceived as being a more affluent market and would therefore be expected to favour more ‘upmarket’ marques. Also both Ford and especially Opel have experienced image problems in Germany. Perhaps they are not perceived by everyone as home market brands? Maybe one of our German commentators can clarify?
Speaking of perceptions, if Vauxhall’s changes once this takeover is enacted, what impact is there likely to be on sales? It’s an unknown. Ford possibly still benefits from its long and extensive manufacturing history in the UK. Similarly in Ireland, despite the factory being shut for over thirty years, the blue oval is still perceived not so much as Irish, but more a Cork brand – and in the ‘real capital’, that distinction matters – to some. I’m leery of getting into the murky depths of politics, but one cannot but wonder what Britain’s exit from the EU will do to both Ford and Vauxhall’s prospects going forward? Without a vibrant UK market, (and shrinkage is inevitable) the viability for the American multi-nationals on this side of the Atlantic looks shaky.
Not wanting to be a Cassandra or anything but as someone else pointed out on these pages recently, Henry’s departure from Europe is not an impossibility if the wind changes direction.
The Astra connection should help. The numbers aren’t really disproportionate though. The UK and Germany are roughly the same size and the numbers are roughly similar.
80.6 million Germans, 64.1million UK’ers. They bought 3,351,607 and 2,692,786 new cars respectively in 2016.
The number of cars bought per head of population is almost identical, at one new car registration per 24 persons.
Yes, but one can’t help imagining that if a ‘great compression’ is to occur anywhere, it will be amidst those Islands West of the English Channel.
Robertas: regarding your “End of Days” comment above. If we look at the history of declining markets what do you see? Mergers and acquisitions. The remaining firms then either close or change their business. Usually they close because upstarts have the technical and innovative edge.
Taking the long view, the number of car firms expanded dramatically as the market grew in the 1900s; then there was a lot of closure and take-overs in the until the first world war but the market grew; a few major firms prospered from WW2 onward but the trend was for mergers and closures (Rootes, BLMC, Simca and co, all the little firms like Autobianchi, Saab, Alvis et al). Then stability and, then from the middle 90s a kind of perpetual crisis after the big firms geared up for more output at the same time based on the premise they could all steal market share. That didn´t happen.
Now we find that various things are limiting growth in the west and we are on the verge of a big technical change akin to the manual typewriter to DTP change. GM are getting rid of Opel while the going is good. PSA are trying to protect themselves by having scale and an electric car platform. Fiat has to close soon, right? Ford will give up on Europe in the next decade and maybe rely on imports from the toxic cinder of the US and the Far East.
It´s a rough outline.
I read somewhere that Ford Europe is currently making 0.5% profit per sale, which if correct is a dismal return for all that capital risk. The only thing that Europe offers Ford is scale, but the company is already relinquishing market share for better margins elsewhere in the world. Against the background of increasing US protectionism, Ford will almost certainly shutter their European manufacturing operations, building cars in the NAFTA zone plus select emerging economies and importing them into Europe.
Yes, 0.5% is not a lot. Maybe they’ll keep the Fiesta here but even the Focus will leave Europe. It’s odd how these two firms can’t make money on such large volumes. VW does. PSA and Renault are back in the black. What gives?
Who knows? VW predominantly sells and reports in Euros, so perhaps currency fluctuations have a lot to do with it. Mary Barra went to great pains to point out that Opel would have been profitable this year, if it wasn’t for those meddling currency rates.
Chrisward: one year of rough exchange rates is not the whole story. However, in the long run that wears down a company.
What GM needed to do years ago was to place all their car engineering in Germany and have trucks and SUVs in the US. Apart from a few Cadillacs, most of their cars could have been spun off Opel platforms – and even one larger than the Insignia could have been used as a Senator. As it is, I can see GM over-reliant on the US and doomed to market other people´s cars elsewhere.
It’s interesting to note how the tone of the press reports has changed over the past week or so. After the initial shock, the bottom line was ‘PSA wants economies of scale at the expense of German workers’. Now, while, by no means celebratory, the consensus us more akin to something along the lines of ‘it cannot be worse than it was with GM’.
Interestingly, there was an exhaustive report on how Opel workers viewed the situation a week ago published in, if my mind’s not playing any tricks, Die Zeit. Most people willing to make any statements were disillusioned with GM and, whilst by no means dreaming about some golden future under the PSA banner, at least willing to give PSA the benefit of doubt. The endless adjourned crises that have come to define the relationship with GM had obviously taken their toll, even with blue collar workers.
If the new Insignia will be as successful as the Buick LaCrosse in the States, maybe the last american Opel will be sooner replaced as expected. This would be a big problem to make Opel healthy soon…
Hi Markus: thanks for that. Those are sobering numbers for Opel, for Buick and for saloon afficionadoes. You’ve noticed how trucks make up a bigger and bigger part of GM’s sale mix. It’s not as if people aren’t buying saloons: the imports and German prestige makers still sell them. Kia will move into the rwd saloon market with the Stinger. Genesis are selling a credible premium saloon. No, it’s partly to do with GM running from that market (though I think Buick’s recent cars are very acceptable). I can see the short term appeal of ditching Opel. It’ll just leave GM dry and at a a raised altitude when fuel prices get higher.
The Lacrosses should be sold in Yurrup – why weren’t they Euro certified? Does anyone know?