General Motors Company (NYSE:GM) announced that it will wind down its Chevrolet brands in the European market, excepting the Corvette, as the company tries to boost its competitiveness in the region through its Opel and Vauxhall automotive brands.
General Motors’ press statement
“The company’s Chevrolet brand will no longer have a mainstream presence in Western and Eastern Europe, largely due to a challenging business model and the difficult economic situation in Europe,” according to the press statement of General Motors Company (NYSE:GM).
Chevrolet is the fourth-largest automotive brand worldwide. Corvette is one of the select iconic vehicles under the Chevrolet brand. According to General Motors Company (NYSE:GM), it will tailor the presence of the vehicle in Western and Eastern Europe. Corvette will also have a broad presence in Russia and the Commonwealth of Independent States.
Strategy for Opel and Vauxhall brands
The automaker explained that the strategy will help Opel and Vauxhall brands to become more competitive and reduce the complexity associated with having both Opel and Chevrolet in Western and Eastern Europe.
Dan Akerson, chairman and CEO of General Motors Company (NYSE:GM) said, “Europe is a key region for GM that will benefit from a stronger Opel and Vauxhall and further emphasis on Cadillac. For Chevrolet, it will allow us to focus our investments where the opportunity for growth is greater. This is a win for all brands. It’s especially positive for car buyers throughout Europe, who will be able to purchase vehicle from well-defined GM brands.”
General Motors finalizing expansion plans for Cadillac brand
General Motors Company (NYSE:GM) is finalizing its plans for the expansion of its Cadillac brand in Europe with numerous product introductions over the next three years.
In addition, the automaker expects to incur net special charges of around $700 million to $1 billion in the fourth quarter of 2013 and first quarter next year due to the winding down of the Chevrolet brand in Europe.
Furthermore, General Motors Company (NYSE:GM) said the majority of the Chevrolet vehicles sold in Europe were manufactured in South Korea. The automaker said it will focus on driving its profitability, managing costs, and maximizing its sales opportunities from its operations in the country.
Sergio Rocha, president and CEO of GM Korea said, “We will continue to become more competitive in Korea. In doing so, we will position ourselves for long-term competitiveness and sustainability in the best interest of our employees, customers and stakeholders, while remaining a significant contributor to GM’s global business.”