The alternative title for this post is “Opel prove how hard it is to build a new brand presence”.
Opel preceded its arrival here in Australia (by six months!) by sponsoring one of our prominent football clubs. By the time the season finishes at the end of September, Opel’s sponsorship of the Melbourne Football Club will have lasted twice as long as their cars did.
Opel announced it will quit the Australian market today, effective immediately. As is usually the case with this sort of thing, the announcement came at 5pm on a Friday. Good form.
Opel say they were struggling too much in this competitive environment and the pressure on prices is only going to increase now that the Australian dollar is starting to fall (as an aside: it took two-three years of a strong Aussie dollar before companies started dropping their prices. It’s taken just two months of a falling dollar and the first article on rising prices came out today).
There are a few lessons to be learned from this.
First, even if you’ve got good cars, which Opel has, it’s not easy launching into a new market. Opel had plenty of ads, even here in little old Tasmania, but they sold less vehicles than Saab did (in a good year).
Second, even if you’ve got 150 years of history, your brand means little to people who don’t know it. If you don’t go in with resources for a long haul of brand building, you’re not going to build your brand. That makes so much sense written down that I’m amazed that the MBA’s at GM don’t get it.
Third, GM have tried to ram a few brands down Australian throats with little success. Hummer died in Australia even before it died globally. A few cashed-up bogans (rednecks) bought them for novelty value but that’s as far as it went. GM set up a Premium Brands division here about 5 or so years ago with the idea of that branch covering Saab, Hummer and Cadillac. None of those brands exist here anymore and two of them don’t exist at all.
You can’t ram a brand into a country like Australia if there’s no demand for it. Australians like the Astra, Opel’s most prominent model, but GM could have quite easily sold it here as a Holden. That it might have clashed with the Cruze shouldn’t have been an issue (Honda sold two versions of the Accord here for years – internal choices aren’t a bad thing).
Will GM learn? It’s unlikely. That involves admitting a mistake and taking ownership of it. GM are much more comfortable just wiping slates clean and washing their hands (usually with other people’s money).
A final postscript – I didn’t know this but it makes complete sense: My mate AlAero tells me that Opel’s admin staff were working out of the same offices that Saab’s staff used to occupy.
I wonder who’ll move in there next?