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FULL ARTICLE | EDITORIAL 
Opel is not a basket case 
Peter Schmidt | Editor

Published: Fri, 17th February 2017 12:17:07 GMT
 




Open quote signThe mind boggles. GMís renewed decision to rid itself of Opel Vauxhall doesnít look clear cut and lacks logic. There are sufficient reasons to suggest that now is not a good time to offload something on the cheap that potentially still looks like a still appreciating asset rather than a growing liability. So no surprise then that cunning Carlos Tavares, who knows a bargain when he sees one, is now showing a serious interest in Opel. A turnaround expert made from the same wood as Fiatís Marchionne and Renault/Nissanís Carlos Ghosn, Carlos Tavares sees value and hidden strength where lesser autoindustry mortals would likely call the undertakers. 

Yes, GMís European arm remains a drain on GMís financial resources. 

The real question is whether Opelís illness is terminal, which clearly it is not. In a fitting parallel, as recently as 2013 PSA faced its own near-death experience and behind closed doors some of its major suppliers were whispering whether the then deeply troubled French carmaker could survive for another two years. 

Not only US carmakers GM, Chrysler and Ford Ė all on deathís door back in 2009, PSA, or for that matter Renault, now stand out as genuine great recovery stories. 

The common link: A financial lifeline, cost cutting, the return to stable market conditions and above all else, profitable trendy products that customers want to buy. 

Subjected to the same treatment, GMís Opel is destined to bounce back to both financial health and even some market share recovery. 

Far fetched? 

So whatís wrong with Opel? 

No two ways about it, this past year Opelís financial rebound was derailed by a painful currency hit resulting from the UKís Brexit vote. 

The same Brexit predicament - plummeting value of Sterling - has hurt Renault, PSA, Ford and a great many other carmakers, albeit to a lesser extent. 

Thatís chiefly because last year the UK still stood out as GM Europeís biggest market. 

Significant as it is, the sterling dilemma is probably dwarfed by one reason  capable these days to blow even the biggest ships off course.

Unlike almost any other comeback kid in this cut-throat business, be that in the US, China, India or Europe, Opelís ability to escape a near death experience quickly was massively handicapped by its inability to field in time a comprehensive and price competitive line-up of trendy SUV-Crossovers

Why? 

Globally, these vehicles stand out as one of the most profitable and fastest growing slice of the vehicle market.

Given that these potentially life-threatening blunders on the key product front are about to be fixed, partly thanks to its cunning product-sharing with PSA, Opel Ė as a continuing GM subsidiary Ė now appears perfectly provisioned to ride off happily into the sunset. 

Finally, given that in the not too distant future electric rather than diesel or petrol-fuelled cars will likely account for a forever growing slice of Europeís new car market, GMís latest all-electric Bolt, badged Opel, Peugeot and Citroen, would potentially provide a forever growing slice of incremental and ultimately profitable sales for the PSA-Opel partnership. 

So it would not be at all surprising if todayís marriage contract negotiations are called off because the walk to the altar would not trump the gains already at hand from todayís loose partnership. 

Now, that sounds like a familiar trend
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