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PARIS SHOW: Oz "high on the list" for Opel

words - Ken Gratton
German GM subsidiary will likely decide in the fourth quarter of 2010 whether to join the fray in Australia
2010 Paris Motor Show News Special

Opel is embarked on an ambitious international expansion program -- and Australia is one of the target markets.
 
Speaking with Opel's Executive Director of International Operations, Michael Klaus, at the Paris motor show, the Carsales Network learned that the company is reviewing the respective business cases to develop previously untapped markets for product exports. While the business case for Australia doesn't appear to be as far advanced as for other markets, Klaus appears confident in the brand and its ability to compete directly with Volkswagen locally.
 
"To begin with, we are looking at expansion of the international sales base for Opel because that's part of the restructuring brand," explained Klaus. Due to the wheeling and dealing between parent company GM and the German government, this is one of the steps Opel must take -- grow sales through exports to new markets.
 
"The intention is to really bring the Opel branded vehicles and the full range of vehicles into the different markets around the world. Therefore we are also looking at Australia at the moment."
 
Opel has announced that it is already committed to Israel and Chile, says Klaus.
 
"And Australia is on our project list as well."
 
But there's no firm decision at this stage.
 
"We are still in a study phase and we are doing business case calculations [to] see if and how it makes sense..."
 
Asked whether he could offer a percentage probability that Opel will establish itself as a player in Australia, Klaus declined, but did place the prospects in the context of 'likely' by what he said next.
 
"It's definitely high on our list... we want to go into the market because it's a very interesting market. I think if you are active around the world, you have to be present there -- and we just have to see how the business case looks..."
 
Klaus himself was uncertain of timing, but he expects Opel to make a decision concerning the Aussie market before the end of the year.
 
"Then the second question is what this decision is going to look like and also when we would return to Australia. There are several scenarios to look at. First of all we are working on a priority list... there is a bit of engineering work to be done on the product if we decide to go -- and that requires some lead time. But a decision to go into the market and how we do it should be made in the fourth quarter."
 
No current Opel model -- with the introduction of the 2010 model year Astra -- complies with Australian Design Rules (ADRs), so that's a major undertaking from the start.
 
Among the scenarios Opel must consider is the little matter of distribution and dealer networking. According to Klaus, the company is open to either option, rely on Holden to assist with local distribution or go it alone. Part of that is down to how Holden would respond.
 
"We also want to see how Holden sees it -- and certainly we are in touch with them..."
 
Klaus has no qualms about hypothetical Opel dealers in Australia being multi-franchise dealers, which could theoretically mean Holden dealers selling Opels alongside -- two volume-selling GM brands in the same town and possibly on the same premises. Or an Opel dealer could set up right adjacent a Holden dealer and compete directly for sales without being owned and operated by the same dealer principal. For a precedent of this kind, it's necessary to look back to the 1960s, when Holden and Vauxhall were selling through two different distribution networks.
 
"My experience is we don't make generic decisions on how the network should be set up," said Klaus. "There will be opportunities for dealers and we should pick the best in each region. That's really what my intention is."
 
On the product front, Klaus made it very clear that if Opel does enter the Australian market, the company intends to offer the full range of models, including the high-performance ones and the niche-market Meriva.
 
"If we go in as an Opel brand, we would also go in as an OPC representative. We would make it part of our brand strategy for Australia."
 
"For all markets we look at, at the moment, we look at the Corsa, the Astra, the Insignia. We certainly think it's a very interesting moment now to offer all of our new products. The Insignia was the first of the new model generation -- very successful car. Astra came afterwards... and the Meriva... is also an interesting vehicle for many markets.
 
The inclusion of the OPC models in the product portfolio indicates that Opel doesn't see itself as a downmarket brand that will go head to head with the budget-buy models in different market segments. Klaus makes himself perfectly clear as to the company they're planning to pursue in Australia. Volkswagen.
 
"That is what we usually benchmark. We usually benchmark ourselves as a European brand, as a German brand [with] German engineering -- and therefore, we have a good opportunity to position ourselves close to Volkswagen. It is not only the case in Australia, that is the case around the world. Volkswagen is very aggressive in the Australian market -- and this is why I'm saying we jointly have to look at what the strategy should be and what kind of products [to offer]..."
 
Opel's product on the stand in Paris was looking pretty strong. Apart from the Meriva, the Insignia and the Corsa, Opel had the latest Astra, including the newly-launched Astra Sports Tourer and the GTC Paris concept car (which looks like a Scirocco competitor, although Opel expects the production version to compete with three-door Focus and Golf also). The company also offers an EcoFLEX range of cars that will run on different fuels and feature auto-stop/start for fuel efficiency. And then there's the Ampera, which if the brand ends up in Australia, would compete directly with Holden's rebadged Chevrolet Volt. Interesting times ahead for GM in Australia if the Opel initiative works out.
 
 
Who are Australia's Opel drivers?
Drive an Astra, Vectra or Spanish-built Barina? You're likely driving an Opel and may not even be aware of it.
 
All three vehicles -- barring locally-manufactured Vectras and the badge-engineered Nissan Pulsars -- were built by Opel, but sold in Australia as Holdens during the period from 1995. You may still be able to buy an Opel-sourced Astra through a Holden dealer if they have any left in stock.
 
The flow of 'Hopels' began drying up around the time that supply started looking troublesome, with GM facing bankruptcy and casting around for Opel buyers. And in Australia, the GM-DAT cars (current Barina, Viva, Cruze, Captiva and Epica) were achieving similar sales numbers, but without the landed cost of the German (or Belgian/Polish/Spanish) cars.  Although the Astra was, for a time, the second-best selling car in the small-car segment, it hasn't been that successful in years. So the loss of Opel product to Holden has been of peripheral importance.
 
The 'incognito' Opel brand in Australia has a convoluted history. Some Astras were actually N12 and N13-model Nissan Pulsars, and only the SB and XC model Barinas were Opels, the earlier Barinas being re-badged Suzuki Swifts and the current TK model developed from the former Daewoo Lanos.
 
All the same, there's some residual buyer loyalty to Astras in particular and there's also some yearning for new products such as the mid-size Insignia -- generally considered to be a more modern and appealing car than Holden's Epica. Combine those market elements with Volkswagen's local success and a determination to make up for financial failings in the recent past -- and you have the makings of a plan for Opel to enter the market under its own name for the first time.
 
While it's easy enough to write off Opel as another barely known Euro brand, there's one other important reason to think the German company might just succeed here -- it provided the DNA in the first instance for what has been the best selling car in Australia for the past 15 years -- the Holden Commodore. Arguably too, Holden wouldn't be where it is today without the input of former Opel suspension engineer and later Holden MD, Peter Hanenberger.

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 Powered By Motoring.com.au Published : Friday, 1 October 2010


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