Chevy to be discontinued in Europe
GM will promote Opel, Vauxhall brands
Eric Kaminsky - December 05, 2013 11:00 AM
General Motors announced plans that beginning in 2016, the Chevrolet brand will no longer have a mainstream presence in Western and Eastern Europe. Instead, GM will compete in Europe’s volume markets under the Opel and Vauxhall brands. The company cited a challenging business model and the difficult economic situation in Europe as the reason for the change.
Chevrolet, the fourth-largest global automotive brand, will offer select iconic vehicles – such as the Corvette – in Western and Eastern Europe, and will continue to have a broad presence in Russia and the Commonwealth of Independent States.
This, the company noted, will improve the Opel and Vauxhall brands and reduce the market complexity associated with having both Opel and Chevrolet in Western and Eastern Europe. In Russia and the CIS, the brands are clearly defined and distinguished and, as a result, are more competitive within their respective segments.
Cadillac, which is finalizing plans for expanding in the European market, will enhance and expand its distribution network over the next three years as it prepares for numerous product introductions.
“Europe is a key region for GM that will benefit from a stronger Opel and Vauxhall and further emphasis on Cadillac,” said GM Chairman and CEO Dan Akerson. “For Chevrolet, it will allow us to focus our investments where the opportunity for growth is greatest.”
Chevrolet will work closely with its dealer network in Western and Eastern Europe to define future steps while ensuring it can honor obligations to existing customers in the coming years.
“Our customers can rest assured that we will continue to provide warranty, parts and services for their Chevrolet vehicles, and for vehicles purchased between now and the end of 2015,” said Thomas Sedran, president and managing director of Chevrolet Europe. “We want to thank our customers and dealers for their loyalty to the Chevrolet brand here in Europe.”
The majority of the Chevrolet portfolio sold in Western and Eastern Europe is produced in South Korea. GM will now increase its focus on driving profitability, managing costs and maximizing sales opportunities in its Korean operations.
With the decision that Chevrolet will no longer have a mainstream presence in Western and Eastern Europe, GM expects to record net special charges of $700 million to $1 billion primarily in the fourth quarter of 2013 and continuing through the first half of 2014. The special charges include asset impairments, dealer restructuring, sales incentives and severance-related costs, and will pave the way for continued improvement in GM’s European operations.