GM Loosens Opel Reins

Opel to be sold beyond Europe

General Motors is down to managing four brands in North America now that Pontiac, Saab, Saturn and Hummer have been sold or shut down.

Cadillac, GMC, Chevrolet and Buick comprise its North American brands, but the company also owns Holden (Australia), Daewoo (Korea), Vauxhall (UK) and Opel (Europe). Holden and Daewoo are sold beyond their local markets, but Opel is not. Vauxhall is Opel in the UK and other markets, selling the same models under a different brand.

Up until now, Opel has been sold only in Europe. Its cars, which have been reworked and sold in the United States as the Saturn Astra, Buick Regal and Chevrolet Cruze, are a good fit for other markets, but GM has kept tight reins on the brand. However, that is about to change.

Opel Initiative

According to Crain Communication’s Automobilwoche (Automobile Week), a sister publication to Automotive News, Opel will soon be sold in China. GM has been enjoying a booming success in China where its Buick brand is a national darling. Chevrolet is sold there too as are some Daewoo products.

Interestingly, Australia is another market where the Opel brand is slated to be sold. That’s Holden territory, but the products likely to be sold down under should be different. Indeed, although the Opel Astra inspired the Holden/Chevrolet Cruze, they are not the same cars. Conceivably, Opel could sell the Astra there too.

Other Markets

Opel will also be selling its cars in two unidentified South American market and one unnamed Asian market besides China. Likely, some of those models will compete against existing GM brands which could present a problem for GM if the Opel introduction isn’t carefully managed.

Following its 2009 bankruptcy filing and reorganization, the General Motors Company has been on a fast track to remaking itself.  In North America and elsewhere, capacity has been realigned to match demand, reducing model availability to their lowest levels in memory.

Opel China

Opel isn’t entirely knew to China as Automobilwoche reports that its cars have been on sale there since mid-2009, with 4,000 units sold. That’s chump change in the world’s largest consumer market, something GM will rectify when the import reins are loosened.

Expect GM to continue to look at new markets for Opel, but the United States and Canada won’t be considered. GM has learned its brand management lesson and is doing what it can to bolster its four surviving North American brands.

Bizzarro World: Mahindra Contract Cancellation

Diesel trucks are delayed…again!

Mahindra & Mahindra’s plans to bring its TR20 and TR40 compact pickup trucks to the United States have hit yet another snag, casting doubt as to whether Americans will ever see these diesel-powered vehicles.

Reports surfacing earlier this week revealed that Indian automotive manufacturer Mahindra has unilaterally cancelled its agreement with its American distributor, Global Vehicles U.S.A., Inc. (GV), to sell its trucks through the dealer network assembled by GV. That action, which seems entirely illegal, will likely force GV to respond by making sure that the trucks stay out of the states until the matter is resolved. If Mahindra does not back down, it could be years—if ever—before a single Mahindra truck is sold stateside.

Unilateral Termination

On Thursday, Automotive News reported the following statement posted to Mahindra’s website: “Mahindra’s relationship with Global Vehicles Inc (GV) has ended, the agreement dated 26th September 2006 between Mahindra and GV having terminated.”

That statement compromised in entirety a press release (or note) issued by Mahindra on August 20, 2010, but only discovered this week. GV was not notified directly nor were the 300 plus dealers-in-waiting. Mahindra received EPA certification for its vehicles earlier this month with plans to begin selling their pickup trucks in the United States this December.

U.K. Lawsuit

Mahindra and GV have been preparing to do battle in a UK court with GV having sued Mahindra to make sure that the Indian automaker follows through on its plans. The thrice-delayed Mahindra trucks were initially supposed to have been sold in the United States summer 2009, but Mahindra had to make modifications to its vehicles first and then seek EPA approval. In the meantime, GV lined up a dealer network across the United States with each dealer having paid $200,000 to join.

Mahindra’s actions have apparently caught everyone off-guard as the automotive press corps is trying to sort through the latest news. However, India’s Business Standard Motoring publication has offered a glimpse of the legal wrangling sure to follow, quoting GV’s communication manager, Max Butler, as saying, “They have to obey US law and can’t arbitrarily dismiss a contractual agreement.”

Lesson Needed

And that statement by Butler is true. Mahindra needs a fast lesson in understanding the way business is conducted in the United States if it ever hopes to sell its line of passenger vehicles here. Seems like a major PR disaster is unfolding before our eyes!

See Also – Often Delayed Mahindra Trucks Due In December

The Chevrolet Orlando You Will Never See…

…unless you go to Europe!

Chevrolet Orlando show car: Not U.S. bound

Chevrolet contributes at least 70 percent of U.S. sales for General Motors. That isn’t likely to change unless buyers suddenly get a hankering for Buick and GMC or if Cadillac sales explode.

But that isn’t a bad thing either — when I rubbed shoulders with Chevrolet brass in Washington, D.C. last month as part of the Chevrolet Cruze national PR roll out, I learned that Chevrolet’s big slice of the pie is just fine with GM management. Why knock what works? And, Chevrolet is by far the strongest weapon in the GM arsenal, on sale in more than 130 markets worldwide.

Product Line

Top to bottom Chevrolet’s product line is new, significantly updated or soon to get refreshed. There are a few products such as the full-size Chevrolet Impala which could use an update sooner rather than later, but that hasn’t hurt Chevy.

The Cruze will soon replace the Cobalt and a smaller vehicle will slot beneath it in the near term. The Camaro is a wonderful halo model and strong coupe, Chevy trucks continue to sell well and crossovers such as the Traverse and Equinox are stylish, roomy and fuel efficient.

One crossover that will NOT be sold in the United States is the Chevrolet Orlando. Based on the platform underpinning the Cruze, the Orlando was supposed to be sold in the U.S., but GM later decided against it. Slightly smaller than the Equinox, but offering 7-passenger seating, the Orlando would likely compete with the Equinox for customers. And that is a big no-no for Chevrolet.

Orlando Absence

When I asked Chevrolet management about the Orlando (in this case Chuck Russell, who is in charge of GM’s small car operation), it was explained to me that GM doesn’t believe that every vehicle it builds needs to be sold all over the world.

The Orlando fits nicely with Chevrolet Europe’s product plans and will debut at the 2010 Paris Motor Show (Mondial de l’Automobile 2010) in October (press days are on September 30 and October 1). But there isn’t a need for the vehicle in the United States, thus its absence.

Chevrolet Europe has seen its sales slip this year over last, mostly due to the end of government-backed “cash for clunkers” type programs. With the Orlando’s introduction in early 2011, Chevrolet will have a model that should compete well across Europe. Powered by a 1.8-liter gas or 2.0-liter diesel engine, the Orlando will be one of four new Chevrolet models to make their Paris debut this year according to Automotive News.

Photo: General Motors Company