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Friday, December 6, 2013

Bye Chevy: GM pulls Chevrolet out of Europe by the end of 2015

GM announced yesterday, by the beginning of 2016 the Chevrolet brand will no longer have mainstream presence in Europe. Reason: difficult economic situation in Europe.

So after killing Saab another GM brand cease to exist here. Comments are saying about serious canibalisation Opel vs. Chevrolet. Which seems to make sense, they are indeed not clearly distinguished from each other. So in a difficult situation of Opel, it seems that GM did two things, investing in Opel and cut in-house competition.

Saab was clearly distinguished.... ehh.

The announcement further states, that Chevrolet doesn't dissapear completely from Europe, some cars will be offered, namely Corvette. And that it continues to have broad (mainstream) presence in Russia and CIS.

It is also clear, that it is very hard to compete against Kia, Skoda, VW and french cheap production. It's a low margin segment, where to make profit one has to sell large volumes.

So the Opel / Vauxhall brand can breathe a bit more. Also GM is finalising plans for expansion of Cadillac in Europe. Same error again ? No, Cadillac as a luxury brand, is clearly distinguished from Opel. However to build up a new brand, the almost non-present Cadillac will be hard work and very costly.

All in all it seems, that the GM products will be like this: low margin volume = Opel. High margin lower volume = Corvette and future Cadillac.

Cross fingers ? Nope, it's impossible to forget what GM did to Saab. But it will be interesting to follow, what will happen over time.

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