Opel, the European unit of General Motors, has released its new plan to stem the tide of more than a decade of losses. The company has been losing market share and reported a first-quarter loss of $300 million. Opel’s problems are among the most severe of all of Europe’s midprice carmakers.
Carmakers in Europe are suffering from a staggering reduction in sales and an overabundance of manufacturing capacity. Many Opel factories are running well below capacity and operating during only two shifts a day instead of around the clock. There has been widespread speculation that Opel may be forced to close one or more factories in Europe.
Opel’s plans include goals like increasing sales outside Europe and beginning to build Chevrolets on the Continent. In a statement, Opel’s chief executive, Karl-Friedrich Stracke, said the company would be honoring an agreement made with workers not to close any facilities prior the end of 2014. Mr. Stracke’s statement also addressed many of the criticisms of company strategy that have been made by worker representatives.
One of the main concerns has been the growing market share in Europe of Chevrolet brand cars, which are imported from South Korea and other locations. Mr. Stracke said, “We are in talks with our colleagues in Detroit and Shanghai to find out whether we can build Chevrolet vehicles in Europe, to improve utilization of capacity.” Opel will also try to build sales in places like Australia, Latin America and the Middle East. Analysts believe that it may take years for Opel to win a share of new markets.
The company also plans to use its factories more efficiently. Mr. Stracke said that the company must reduce the number of factories building the next generation of the Astra to two from three. Mr. Stracke said, “In light of expected demand, it only makes economic sense to have two Astra factories.” The Astra is the company’s best-selling model and is currently built at factories in Poland, Britain and Germany.