GM At Work: Bringing Opel to the Land Down Under

"My boss is in Germany, and this is an Opel operation, but we are both General Motors organizations—so the ultimate goal is to ensure that this makes sense for General Motors in Australia." So says Bill Mott, the genial and eloquent American charged with the task of introducing Opel down under. Along with Opel, the "we" refers to Holden, GM's Australian subsidiary. Australia represents an important part of the German brand's ambitious international expansion drive. But in a country where Holden still is seen as Australia's own and accounts for one in every eight cars sold, what can Opel bring to the party that Holden hasn't already? To understand Opel's pitch, it's first necessary to recognize the seismic shift toward imported vehicles that has taken place in the Australian market in recent years. And within that shift, "[there's] a tendency to look for European and, in particular, German brands," Mott told Car and Driver on the floor from the Australian International Motor Show last week. So strong are German brands, in fact, that in a market that has grown nearly 30 percent in the past 10 years, VW's growth in the same period and market equates to nearly 300 percent—and Audi, BMW, and Mercedes-Benz aren't far behind. Although the Corsa and Insignia—which you might recognize as the Buick Regal—nameplates are unfamiliar ones to Australians, a big part of Opel's strategy in Australia relies on leveraging locals' familiarity with the Astra—Buick might be getting an Astra of its own, too. Wearing a Holden badge, the Astra proved to be a strong seller during its long run between 1995 and 2009. But like other Opel imports, including the Corsa (Barina) and the Vectra, it was axed by Holden in favor of models developed by GM Korea. At the time, it was explained that the business case for importing from Europe just didn't add up. Holden's compact contender is now a locally built version of the Chevrolet Cruze. So, what's changed in the meantime? According to Mott, the change is how strong the Aussie dollar has become. But if it's a simple question of exchange rates, can't the Opel range simply be re-imported as Holdens, without going to the expense of setting up a whole new brand? Mott's response suggests that for prospective Opel customers, the brand is as important as the product. "We think—and when I say 'we' I speak for both myself and Holden management—that our [customers are] looking for a European and, in particular, German brand experience. And [Holden], by definition, can't cover [those customers]. Either we walk away from that market as General Motors, or we attack it. We're bringing Opel to attack it, and we're doing it in concert with Holden." Without doubt, the dynamic between Opel and Holden is a fascinating one. Although they are technically distinct entities operating underneath the same overarching GM umbrella, it's evident there is significant collaboration—Opel's local headquarters is located in the same Port Melbourne building as Holden's. But both companies essentially are GM brands targeting much the same market segments. Surely customer overlap is inevitable, right? Not entirely unsurprisingly, Mott disputes this assertion. "In Europe, there is the Chevrolet brand, and obviously there is the Opel brand. We see very little overlap in customers shopping between, say, the Astra and the Cruze—and that's despite the fact that in many countries, our dealerships have both brands. Customers who . . . are shopping Chevrolet have a different competitive context. The other brands that they're looking at, in the European context, are . . . more-budget-conscious brands—the Kias and Hyundais of this world. An Opel [customer] is generally coming from a different competitive set that is probably much larger, but includes other European brands." Asked to identify Opel's main rivals, Holden doesn't score a mention from Mott. That isn't a huge surprise. What is more curious is that he also declines to name Ford as a direct rival, despite the fact that the European-developed Fiesta, Focus, and Mondeo all are sold in Australia and compete directly with Opel's lineup in Europe. Instead, the importance of the Opel brand again makes itself apparent. He identifies "mainstream European imports"—read Citroën, Peugeot, Renault, and VW—as the key competition. Comparison Test: 2012 Buick Regal GS vs. 2012 Volvo S60 R-Design Instrumented Test: 2012 Chevrolet Caprice PPV First Drive: 2013 Chevrolet Spark With the first Opels arriving in Australian showrooms in September, it's too soon to say whether or not GM was right in its assertion that it can tap into Australia's demand for German autos without cannibalizing its existing Holden offerings. But taking such a gamble in the first place gives us an idea as to just how desperate GM is to find Opel a market outside of Europe to rely on. Read full story » from Car and Driver Blog http://blog.caranddriver.com

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