General Motors Vice Chairman Steve Girsky announced the parting of Chevrolet brand with Europe. GM officials also stated that they want to part the Chevy brand from Europe by 2015 and wants to focus on Opel.
GM said the conclusion is well-thought as the Europe has no potential market due to its demanding business model and the unstable economic presence in Europe.”We believe this is a win for all of our brands here in Europe and around the globe as GM will benefit from a stronger Opel/Vauxhall,” Girsky said. To drop Chevrolet brand out of Europe “will help us to accelerate progress in the region,” he said.
He also mentioned some diverse models will be on sale in Europe such as the anticipated Corvette, Cadillac Marque which is also turning upon the expansion to other regions in the next 3 years will also be there he said. Chevrolet will continue its tenure with Russia where the brand has secured a 5th position in trading which is just behind Renault, Lada, Hyundai and Kia.
Reason behind pulling of this brand
Chevrolet has shown low sales in Europe since the relaunch of brand Chevrolet in 2005 with 200,000 vehicles. Chevrolet initiated trades by selling of subcompact machines such as Aveo and Daewoo which was manufactured in Korea. But Chevrolet’s, Daewoo and others machines on display could not compete with the likes of Hyundai, Skoda and Renault. Those machines are in sync with European markets, despite the high demand on GM vehicles in the Middle East and especially GGC and UAE markets which considered one of the strongest markets for GM and its brands .
The EU and EFTA marketplace has dropped since October to 17% which is 156,260 vehicles including the nameplate sales; which is a mere 1.2 %. On the other hand, Opel and its sister company in UK Vauxhall has dropped a 3% sale which is 718,829 vehicles since October.
After facing immense losses in Europe, Chevrolet strategize their move by reducing their vehicle prices and by introducing premium models. Which collided with Opel models.
Thomas Sedran, president of Chevrolet Europe, said: “Chevrolet’s business results have been impacted by the unfavorable economic environment in Europe.”
Girsky also added that closing down Chevrolet will cost around $700 mn to $1 bn and $300 mn will be non-cash expenditures a special net charge. These expenditures will be on asset demolition, dealer reformatting and partition related expenses. He adds that GM shall try to cover its demolition charges from the earnings in 2014.
Girsky also cleared the air about GM not dropping Chevrolet due to its new collaboration with PSA/Peugeot. This is not influenced by any collaboration and is an independent decision.
