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:
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.
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.
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.
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?