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 Karl-Thomas Neumann, Opel's sixth boss in the past decade, has made
a big splash at the loss-making business, helping to land a
multi-billion euro investment from bosses in Detroit.
The 52-year-old German also appeared to win an important victory
when GM said it would drop its Chevrolet brand in Europe and instead
focus resources on Opel and sister brand Vauxhall.
But some Opel staff worry these advances are in doubt after the
appointment this month of new GM chief executive Mary Barra.
Outgoing CEO Dan Akerson said Barra had been chosen because she had
"brought order to chaos" in global product development, and tasked
her with making vehicle development even more efficient.
Such words spark concern at Opel, which feels constant pressure to
use global platforms and to minimize the level of expensive
customization for the European market has handicapped its ability
compete, a former Opel executive told Reuters.
The management reshuffle at GM will also see Steve Girsky, who
successfully campaigned for more investment in Opel, leave his
position as GM vice chairman.
"A major Opel protagonist is leaving and nobody knows whether GM
will maintain its high-level commitment to Europe," a staff member
at Opel, who declined to be named, told Reuters.
A GM spokesman in Detroit said there was no change in its stance on
Opel.
In a further blow for the European brand, GM also said this month it
was paring back an alliance with France's PSA Peugeot Citroen <PEUP.PA>
after it failed to reach cost targets.
Opel was relying on that partnership to develop a common platform to
help revamp its range of small cars, some of which like the Corsa
have been on the market since 2006, and drive its market share back
above 6 percent in Europe, compared with a high of more than 10
percent a decade ago.
STARTING WITH ADAM
So, just at the time Opel needs to build new cars for the European
market, it has seen a key manufacturing partnership weakened and is
set to lose a GM board member who fought the brand's corner in
Detroit. That has put the pressure on Neumann, a keen marathon
runner from Lower Saxony, to deliver.
As recently as April, he helped secure 4 billion euros ($5.5
billion) of investment from Detroit to fund 23 new models and 13 new
engines by 2016 to overhaul Opel's ageing product range.
But Metzler Bank auto analyst Juergen Pieper said reversing years of
neglect would not be easy.
"If you have a weak brand, your cars need to be twice as compelling
to persuade clients to switch and to grow sales," he said. "Merely
developing cars which are 'as good' is not enough. Clients will
stick with the brand they already like."
Neumann's relations with his bosses could depend in part on the
success of Opel's recently-launched Adam subcompact city car, built
on a cut down Corsa platform with upmarket interior trim and
multimedia features.
The early signs do not appear encouraging.
Opel started selling the Adam in January but production at its
Eisenach plant — where the Adam and the two-door version of the
Corsa are made — ran idle for five days in October, and for six in
November, due to a slump in demand.
Opel says this is due to lower sales of the ageing Corsa, insisting
that demand for the Adam remains high, with more than 55,000 orders
since it was launched. In Germany sales of the Adam are on track to
beat 20,000 sales by year end, Opel said.
The latest sales figures from industry body ACEA show that while
European car sales rose 0.9 percent in November, GM sales of the
Opel and Chevrolet brands in Europe slumped 3.8 percent.
"If the cars that are built for Europe to European specifications
fail to sell, then the whole rationale of giving Opel more leeway
falls away," said another former Opel executive, who also declined
to be named.
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FOCUS ON EUROPE
GM, the world's No. 2 carmaker behind Toyota <7203.T>, came close to
selling Opel in 2009 before changing its mind.
Opel has suffered for years from management disruption, a scarcity
of small cars which resonate with European consumers, and the
tension between GM's desire for global economies of scale and Opel's
calls for customizations for the local market.
The current Opel Astra is a case in point. By sharing a platform
also used in GM's Chevy Cruze, the car is wider, and 20 to 30 kilos
heavier than its main European rival, resulting in lower fuel
efficiency and slower acceleration, the first former Opel executive
said.
The Astra has also been on the market since in 2009, a period during
which Volkswagen <VOWG_p.DE> has put two generations of its rival
Golf model into showrooms.
Opel's Corsa has a similar problem. It competes in Europe's small
car or subcompact segment, the biggest slice of the market totaling
24 percent of new car registrations in the region year-to-date,
according to data from JATO Dynamics.
Opel's current Corsa subcompact was launched in 2006, making it one
of the oldest products being offered in European showrooms where it
competes with the Ford Fiesta, the Peugeot 208 and the Renault Clio.
In 2012, Corsa sales fell 14 percent.
A new version of the Corsa, based on a platform developed with Fiat,
is due next year. But Peugeot and GM this month said plans to
jointly develop the subsequent generation have now been buried,
forcing Opel to choose a platform from the GM stable.
Neumann, who studied electrical engineering at TU Dortmund
University, came to Opel after starting out as an engineer with
Motorola Semiconductor, and moved to become CEO of German auto
supplier Continental. He joined Opel only in March after a stint at
Volkswagen where he served as head of its China operations.
At Opel, Neumann has moved to pare back the European brand's once
global ambitions and repatriated some production from South Korea by
moving production of the Mokka subcompact sport utility vehicle to
Spain from the second half of 2014.
But this has left Opel with only a handful of export markets such as
Chile, Singapore and the UAE, and more exposed than ever to Europe,
where the industry is struggling to emerge from a six-year slump in
sales and dogged by overcapacity.
"Rebuilding a weak brand takes years of delivering outstanding
product, the question is whether Europe has so much upside potential
that General Motors will decide to make Opel its top priority for
years to come," Metzler's Pieper said.
(Additional reporting by Ben Klayman in
Detroit; editing by Mark Potter)
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