Turning a once-regional brand into a global one comes with a great deal of risk, especially when you have a pre-existing, well-recognized brand in the same market, with similar market positioning. That’s what General Motors has run into in its campaign to make Chevrolet the company’s global volume brand. Opel had long been GM’s mainstream brand in Europe, and Chevrolet’s entry into the market confused customers and frustrated dealers.
The current plan, under Alan Batey, Chevrolet’s new global brand chief, is to position Chevrolet as GM’s value brand in Europe, and move Opel upscale, to compete more directly against the Volkswagen brand. Volkswagen also sells the Czech-based Skoda brand in many markets in Europe as their “value” brand, according to a Reuters report.
Although Opel has lost money in Europe for the last 13 consecutive years, it enjoys a much larger market share currently than Chevrolet at 6.8 percent, compared to 1.1 percent for Chevrolet. There have been plans to align Opel’s product lineup more closely with Buick’s, which will remain primarily a regional brand in North America and China.
The “Opel issue” has long been a drag on GM’s profits and resources, and many urged GM to dump the struggling European brand in its 2009 bankruptcy and restructuring, but the company held on, seeing strategic value in its research and development operations.