The German Patient’s Geneva Sicknote

What are we to make of the news that Opel will not be exhibiting at the Geneva Salon in March?  The announcement came on 16 January, just over six weeks before the show opens to the world’s media.


The official justification from new owners Groupe PSA is that “If there is no new product, then the brands won’t be there”. The under-performing PSA premium brand DS will also not be represented at Palexpo; that’s a distraction I’ll not pursue further.

The corporate excuse is unconvincing. The Grandland X has only recently gone on sale, likewise the Insignia GSi, drearily named but interestingly specified.

Even in the belt-tightening Tavares era, it wouldn’t be beyond PSA’s means to come up with a concept car to mark the first anniversary of the announcement of the takeover. Peugeot, Citroën and even DS have usually been able to come up with a futuristic or amusing showpiece for every season. Such things probably cost less than a couple of Champions’ League half-time TV advertising slots, and express a vision of the brands’ future.

Quite what Opel’s future holds is bewildering industry watchers. Perhaps  PSA don’t know either.

Opel have a new strapline for the PSA era:

Source: Opel International

Die Zukunft gehört allen…

I find myself asking ‘Welche Zukunft hat Opel?

No more “Wir leben Autos” Liebt Peugeot noch Opel?

The biggest indication of the souring of the romance is the widely reported story from November 2017 that PSA is seeking €600-800 million compensation from GM, alleging misrepresentation of their European division’s ability to meet 2021 emissions deadlines. They claim Opel’s in-house powertrain technology was well behind their own, and the compliance strategy was propped up by imports of the Ampera-e EV from the USA, sold at €10,000 below cost, in numbers which would further undermine the chronically unprofitable division’s chance of ever breaking even.

The amount claimed represents unanticipated investment PSA need to make to bring down the Opel range’s emissions levels. The first line of attack is electric and PHEV versions of the Crossland X and Grandland X, both PSA developed products, so we can expect the new technology to feature on Peugeot and Citroën offerings too. PSA also say that in order to achieve emissions compliance all Opel products will need to be replaced with new designs based on PSA platforms and powertrains by 2024. The pre-takeover business plan anticipated the transformation would not be completed until 2027.

To descend briefly into matters of vulgar money, the €600-800 compensation claim is around half the €1.3 billion price paid by PSA for Opel. The hit taken by GM for exiting Europe is reported at around $6 billion after the proceeds of the sale of Opel to PSA and the sale of their European finance division to BNP Paribas for €900 million.

Carlos and Michael set the PACE. Source: Groupe PSA

The Tavares / Lohscheller PACE strategy for Opel / Vauxhall presented on 9 November is based on lower sales and higher margins, with a break-even volume of 800,000 vehicles. In 2016, Opel / Vauxhall’s last full year under GM ownership, 1.16 million vehicles were produced.

The buying public are doing their bit to help Carlos and Michael in the first part of their objective, particularly in the UK, where for the past few years more Vauxhalls have been sold than Opels in Germany. 2017 Vauxhall sales dropped 22% from the 250,955 vehicles sold in 2016. Corsa sales fell by 30%. The grim and ancient B-sector bucket was the bulwark of Vauxhall’s strong sales, a woefully uncompetitive product which sold only on low price and familiarity.

With the collapse of UK sales numbers came the questions over the future of the Ellesmere Port Astra production facility. PSA claim costs per vehicle are double those of their most efficient facilities in France. Negotiations are underway to cut workforce numbers by 650 jobs, a third of the present strength. In the last few days, new facts emerged suggesting that PSA were ready to administer similarly unpalatable medicine at the Zaragoza factory, which builds the Corsa, Mokka X and Crossland X, and ran at 80% capacity in 2017.  In the event a deal was struck.  Zaragoza’s 5300 employees are still in work, but life will be harder under PSA than it was with GM as their masters.

Source: autovia-media

Is there any good news? I wish I could say so. At Geneva last March, Diplomat Coupe owner and Opel CEO Karl-Thomas Neumann spoke enthusiastically of Opel as a German marque within the PSA group.

Until Opel sold its soul in the early seventies to become GM’s global small car patternmaker, their cars were German in character almost to the point of caricature. I hoped for the return of the old names; Kadett, Rekord, Kapitan, along with some good-humoured homage to the products of Wirtschaftswunder era.

At Geneva Tavares’ and Neumann’s stated regard for each other seemed like a veritable bromance.


In June 2017 Neumann resigned from his post. He presently occupies himself by repudiating Tavares’ criticisms of the way Opel was run pre-PSA takeover. If the industry rumour mill grinds true, he may be contemplating replacing the Diplomat with a nice example of the Auto-Union 1000SP, or maybe a pre-WW2 Hörch.

His successor is the Opel Chief Financial Officer Michael Lohscheller.

Where is it going? Divorces in the automotive world are no longer unknown. We have witnessed the catastrophes of BMW and Rover, Daimler and Chrysler. In both cases there was a valuable SUV brand attached to the weaker partner, although nobody realised at the time just how valuable.  And in both cases the stronger halves let go of the SUV brands, such was their desperation to escape the ill-judged dalliance.

Opel have no Land Rover or Jeep, indeed it’s hard to see what they have of worth to PSA other than market share and a dealer network. Probably worse than this, they have burdened PSA with production overcapacity and manufacturing facilities with far higher unit costs than their adoptive parent, or most of their European competitors. In the last third of the twentieth century, Opel was GM’s brains, and possibly its saviour. Now it looks like Europe’s most dispensable car brand.

Source: Auto Bild

Managed decline and death by badge-engineering looks like Opel’s most likely fate. A Corsa replacement, based on the PSA CMP platform is due in 2019. Will it be their Samba?


35 thoughts on “The German Patient’s Geneva Sicknote”

  1. Do PSA see customer demand requiring increased manufacturing capacity and that is what the bought Opel for?.
    Would that be described as French arrogance and complacency?.

    1. Complacency, I’d say. That and the denial of massive over-capacity in Europe.
      It’s be nice if they’d dust down that tasty Diplomat coupé, but they won’t.

      You’d expect PSA to do proper due diligence on Opel, before parting with the cash and then bleating afterwards; after all, the engine performance wasn’t secret.

      is interesting, but a little out of date and optimistic.

    2. I guess it’s difficult for PSA to explain without declaring their plans to all.
      Let’s just hope they do actually have a plan beyond mere capacity.

  2. With everybody becoming ‘premium’, it appears only logical that ‘regular’ marques with weak selling points would eventually have to face obsolescence.

    After more than two decades of mismanagement and brand erosion, it’s little wonder that Opel is having a hard time making a case for itself. In fairness, it’s not as though only bad decisions have been made at Rüsselsheim: the focus on MPVs was worthwhile, but arguably too late by about five years. The upswing in perceived quality the Insignia I brought about was equally commendable, but only really closed the gap that opened up during the production period of the previous two model generations.

    I don’t bear Opel any ill will, but by any even remotely Darwinian valuation, the marque has lost any relevance. Which is terrible, given the effort put into it by the workforce and more recent management.

    Karl Thomas Neumann doesn’t just own the Diplomat Coupé, but was recently snapped piloting an (original) Opel GT, as well. If only he’d managed to add some of these models’ flair to the current range…

    1. As a counter example: Mazda, Kia and Hyundai aren´t premium but seem to do okay. And Peugeot has turned the corner as well. Opel belongs in a class of its own, doesn´t it? Without wanting to get technical or overly engineeeringingy, what precisely could Opel do in 12, 24 and 36 months to address this “premium” business? Before anyone says “Corsa”, I am aware of that problem. GM gave Opel a poisoned pill by tying them to the 2004 platform.

    2. Our brand new Astra BK 1.4 110kw 6A in the hot Australian summer exhibits fuel vaporisation symptoms on hot starts and not all that convincing when cold either.
      Not sure if it’s economy is any better than our C4 Picasso 1.6 e-THP 6A which is heavier and more frontal area.
      Funny to think of them as both being owned by PSA.

    3. None of those brands has such grave perception issues as Opel.

      Mazda’s turnaround started with the new nomenclature and Morray Callum’s hardly groundbreaking, but competent stewardship of the brand’s design. Hyundai and particularly Kia’s image has only ever been on the rise so far (at least as far as Europe is concerned). Peugeot has only recently, and only just regained any kind of relevance outside the fleet/discount fodder sphere.

      Neither of those marques has had to go through as sustained a period of discontent as Opel. Neither was plagued with quality issues as damning as Opel’s during the ’90s.

      Say about KT Neumann all you like, but his assessment of Opel’s greatest hurdle being that of public perception was spot on. Unless they get some massive injection of investment or come up with a game changer on the scale of a Mégane Scénic or a Qashqai (sic?), Opel as a brand is doomed.

    4. Which other regular marques with weak selling points have you in mind?

      For the record my 12, 24 and 36 month turnaround plan would involve an immediate change to sales and servicing. Nothing builds confidence like reliability and if Opel customers had 7 year transferrable warranties that would boost expectations. I´d run a new Opel/old Opel ad campaign to remind customers of great earlier Opels.
      Opel should do an audit of the top 50 fails in their cars which means buying data from road-side assistance firms if necesssary and find and fix whatever it is leaves Opels stranded. That means also a new relationship with suppliers: payment is related to cost and reliability. I think the cost cutting method has been a disaster.
      For 36 months, Opel needs cars people want badly. Dial in the fun-to-drive factor and the comfort factor for all models so that customers can choose the car they really want rather than a compromise. I think the Opel ride-handing compromise is pretty good. The last Astra I drove was a really pleasant motor car. Not enough people think this.

    5. Here in N France Opels are still popular, and mainly compete with Fiat and, at the bottom end, Dacia (in far more iterations than are sold in, eg, the UK).
      I have actually asked the main breakdown man, and he says Renault are by far the worst because they launch the cars and let the owners do the development for them!

      But Opel’s Karl and Adam are not doing at all well. Seeing a Karl in a ghastly salmon pink is enough to put anyone off. Corsa and Astra still OK. But absence of an e-car suggests they’re not in the tech vanguard.

    6. ‘Which other regular marques with weak selling points have you in mind?’

      Peugeot, Citroen, Honda, Fiat, Ford – from a European perspective, that is.

    7. I didn’t even think of Honda.
      PSA seem to be managing reasonsbly. Fiat is in terminal decline. Ford is teetering and show no sign of recognising that running away from the late 90s formula has worked.

    8. I fear we have seen the last of of the Opel GT concept seen at Genf in 2016.

      When I spoke to some Vauxhall people on the stand at the time, there seemed to be a real will to make it happen, damn the expense and the non-availability of any suitable platform. It would be a gesture to show that GM in Europe were on the way back, and meant business.

      In my “If I was Carlos Tavares” notion, I’d be presenting the new generation Astra GTC as a new Manta with retro colour schemes – Opel had several great ones to choose from. Perhaps some EVs and mobilty concepts would feature too but they don’t stir the spirit in the same way.

      That’s the dream, but as of today, Opel have been part of PSA’s fiefdom for six months, and they seem to have gone into hiding.

  3. PSA complaining about GME’s technology? Wow, that’s rich.

    Their compensation claim seems spurious in the extreme. Don’t these companies bother with due dilligence anymore? Don’t they employ people who have genuine insight into the car market? A morning spent kicking tyres in a Vauxhall or Opel showroom would tell you that the cars are not exactly cutting edge. GME’s willingness to launch two new SUVs based on PSA platforms (creaking) should have set off alarm bells.

    Dear me, what a mess.

  4. I do like your 7 year transferrable warranties idea. Mainly it’ll be windows, wipers, heating, faulty light bulbs etc, so not too arduous.

    1. I am sorry to hear the Adam is not doing too well. The thing is that maybe it´s not a French type of car. It´s small but also regally appointed. I drove one and now belong in the Adam fan club. Some customers might decide that small means cheap or that something in the Adam price range ought to be one size up. I see it as a car in the Lancia Y mould or something Ford Fiesta Vignale customers might want. They are quite common in Denmark, I note. Ditto the Karl which is a bargain-priced car (not a super lovely one though – quite humdrum).

  5. I’ve not driven one but the current Astra seemed a step in the right direction… a little smaller (without compromising interior space), a little lighter, better perceived quality inside and out… all welcome.

    But we are talking marginal gains here, when what Vauxhall / Opel really needs is something more. As for PSA, why do they not invest in their version of VW’s MQB – a properly well-engineered, flexible platform, that can support a number of different track and wheelbases, drivetrains and suspension configurations? Without that, the whole project will be sub-optimal.

    1. I´d like to try the new Astra. The outgoing model really appealed apart from its missing rear central arm-rest. The looks are growing on me, especially the five door. The estate looks a bit tippy-toed.

  6. I for one will not be looking to Opel or Vauxhall for a replacement of my recently sold Ampera since that range has either been killed off or is to far down the line to consider. I would like to have had the opportunity of having a Bolt EV but their lack of products in this sector is embarrassing while virtually every manufacturer is presently on the “EV band wagon”.
    Just one sale but its gone to a BMW i3.

  7. When it comes to considering Korean cars, I always think of their motivation with regard to their relationship with their near neighbors Japan, and perhaps a desire to exactly automotive revenge by whatever automotive industry means.
    I regard them as a motivated, nationalistic force, as compared to the half hearted Americans and their European divisions.

  8. It’s difficult to know who and what to believe these days. For instance, when the current generation Astra was launched, Autocar told readers, “there’s a great deal that’s brand new about this car, from its platform to its engines, suspension tuning and more besides. General Motors appears to have gathered together all of its latest and greatest technology and thrown it at this car…” It also claimed that the Astra was the first model to use GM’s ‘new’ D2XX platform, replacing the previous model’s Delta II underpinning.

    What we don’t know is whether Autocar were correct or if they fell for a nice piece of PR spin. Could be one or the other, but the net effect was a nimbler, lighter, more efficient car, something the new Insignia can also lay claim to being. Yet we’re now hearing that PSA are crying foul over power units and drivetrains that are not compatible with forthcoming EU regs. Something doesn’t particularly ring true here. Of course it’s possible that some of GM’s power units may be outdated and equally so that some of PSA’s are a lot more modern and efficient. But all of them? I find that difficult to swallow whole.

    From what I can gather, it was always PSA’s intention to replace GM’s powertrains with their own, for the straightforward reason that it would leverage PSA’s economies of scale and bolster their balance sheet. So instead of completing this process by 2027, they will now need to do so three years early. Sure, there will probably be a cost implication to this, but to suggest dodgy dealings on GM’s part seems a little threadbare. (Mind you, marks for trying one supposes).

    One cannot help wondering if there is more than a little buyer’s remorse at Sochaux over a purchase which seemed little short on logic a year ago and even more so now, especially since the UK car market (one of GME’s biggest) has hit the central reservation and PSA faces little but the more numerous downsides. Because quite frankly, even if GM pulled the wool over PSA’s eyes, it would hardly be the first time that occurred in the automotive sphere. Were they aware of the term, caveat emptor?

    Anyway, perhaps it’s all part of Carlos’ cunning plan. But what if there isn’t one?

    1. Autocar seem to be right. The equivalent Peugeot engines lack a bit of puff by comparison. But re EU regs, it’s assumed these are always a stitch-up between the French and Germans (“Just go away and write what you want, and we’ll wave them through”) and Opel were out of that loop. No matter that earlier Astras met EuroNcap 5.

      But, as you say, caveat emptor.

    1. I don’t think so, but it will surely come.
      So far, diesel sales in France have not fallen much. But this is because so many new cars are bought on new finance deals where you can dump the car back again after three years…

    1. So far the finance houses have managed to feed the three-year-olds back into the s/h market slowly enough. But in another three years, when diesel bans are that much closer, who knows?

  9. PSA’s petrol engine strategy seems to be heavily based on downsized units with heavily boosted forced induction. These are the very sort of engines which are reported to perform poorly under the WLTC testing regime.

    Still, there are ways round everything…

    1. I guess GPFs will give them some extra life……mine’s a ‘keeper’ for that reason.

  10. Vic, in 3 years at the rate of change with e power, second hand 2018 leafs will be competing along with the obvious benefits of lower unit costs, not to mention VW et al.

  11. Excellent article and comments. GM paid through the nose to get out of Opel, and PSA seem to have had their blinders on and cinched tight, with visions of virtual sugar plum fairies piped in on to replace reality.

    However, I can see zero reason to suspect GM’s gasoline engines are behind PSA in any way at all. I’d suspect the exact opposite to be true.

    Diesel engines are a different matter entirely though. I can never work out if GM still have some back door tie-up with VM Motori or not. Their recent Euro diesels seem to have an Italian connection. Outside of Europe, car diesel engines are of minor import it seems to me, so GM neglecting them is not surprising. Meanwhile, one presumes GM’s newish Hungarian petrol engine factory with its new designs are up-to-date. Was that factory part of the Opel to PSA sale?

    I find this statement truly strange:

    “Until Opel sold its soul in the early seventies to become GM’s global small car patternmaker, their cars were German in character almost to the point of caricature.”

    Since GM owned Opel and had for 50 years by the late 1970s, what on earth would Opel’s wishes have to do with anything? If GM in Detroit decided to go a certain way, then the only response Opel would have had was to say yessir and get on with it. They were not independent enough to sell their “soul”, because it didn’t belong to them in the first pace.

    1. Re Opel selling their soul; Skoda can’t either, simply because they are Wolfsburg’s puppets in almost every respect.

  12. Its a cruel and harsh punishment by PSA to ban Vauxhall-Opel from Geneva. They can’t be saving much cash as I imagine all but the catering was organised and paid for at this late stage? It must surely damage these already weak brands by not allowing them to display just 2 years after taking the COTY award? Then there is the lost goodwill from the employees and the dealers towards the PSA Parent.

    The problem with GM-E was a chronic lack of investment. The customer goodwill was bought by paying off those disgruntled with their purchase. Real engineering took a back seat, what was done was directed by bean counters. The cost-cutting was intrinsic and short sighted. Loyalty, like the actually very good Lifetime Warranty was swiftly shelved. While the generations of family dealers who took-up the slack when gearboxes and the likes repeatedly failed, were cut-adrift. National dealer groups who sold on volume and price took hold. Customers took flight.

    I can see no way back for them now. Especially since Vauxhall’s presence in the UK is continually diminishing by being off-shored. Can anyone tell me what Vauxhall Opel’s brand positioning is? It used to be -10% of VW and a rival to Ford. I don’t think this is the case now? It can’t even compete with a Korean rival.

    Their only good and original car was the Zafira -and that was a skunk project.

    1. Yes, the decision is very short sighter. Imaginably the top PSA brass didn´t like the show Opel had prepared and decided to can it. What are Opel? My idea is that they represent solidly made, comfortable cars with a lot of content and a reasonable price. I should say my impression of Opel is founded on a test-drive of a 1985 Senator which I was really impressed by. I also have found much to admire in their styling down the years. The values I have mind are easy to understand but fragile. As you said, a well-established and personal dealer network means a huge amount and losing that is a knife to the artery. Pile-them-high-dealers have no love for the brand earned through owning the cars and relations built up over many years.

    2. Opel management were stuck between indifferent US management and a true German brand; VW.
      What long term chance did they have?.

  13. I’ve just been trying to make sense of the January 2018 German sales figures.

    Opel sold 17,364, actually up 0.4% from January 2017.

    Ford have little to be smug about, despite their 18,387 registrations being up 16% from the same month last year, as the overall market is up 11.4%.

    Hyundai and Kia’s combined number is 13,503. These two look best placed to fill the gap left by a declining Opel, badge-engineered out of relevance. Their combined offering – largely cognate between the two companies -already looks more relevant to most of Europe than Opel’s.

    Development funds which went into the Insigaldore would have been better spent on a Sportage / Tucson sized SUV. Trouble was, Opel had to dance to the USA and China’s tune, developing a D segment car for what has become a moribund market sector in Europe, and finding themselves beholden to PSA for SUVs.

    Lord Sward is right about Geneva. Opel always had a well-located and spacious stand, and really made the effort. It’ll be interesting to see what takes the their place in their corner of Hall 2.

    1. The only thing I’d comment on is that January sales figures are always a distortion.
      I’m a beneficiary of Holden Australia’s decision to compete for volume by encouraging dealerships to register there holdings and declare them as sold.
      Not so fast; it wasn’t selling well and then the need to dump the overhang at prices guaranteed to upset established owners .
      They all do it, and some can actually carry it off, but it all comes down to the underlying demand.

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