Opel Quits Australia

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).

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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?

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15 Comments

  1. might have something to do with GM seeking more funding from the federal and south australian governments for holden, still a shock though…..

  2. There are 405 Opels (mostly demos, thus reported) for sale on Carsales today, so the number of actual sales is very low in the 11 months here, maybe 1000. In that time, I’ve seen maybe 3 on the road. Everytime I drive past the local Opel dealer while demonstrating an Audi, the place is a wasteland.

    Just another un needed brand in an overcrowed market. Can’t wait to see the MG sales over 12 months.

  3. I’m surprised the Astra didn’t sell better. The previous model was very popular as a Holden, and the current one is a better car than the Holden Cruze which replaced it in the Holden line up. BUt I guess it all comes down to cost? I suppose Holden will now be responsible for the small number of Opels that did get sold here?

    1. Re; The previous model was very popular as a Holden….

      That actually says it all.

      Typical GM badge engineering, and this time, it went wrong [again].,

  4. I’m not surprised by GM’s management , big talk in the US of American made and so little is , most of the Cars and trucks we see are made in Canada in a union busting effort . In the 70’s and 80’s they gave away the the plants and closed the US manufacturing here . I really know so little of what the final goal is all I know is I can buy one from what I see as a politics to benefit management .

    1. “most of the Cars and trucks we see are made in Canada in a union busting effort”

      Dave,

      You will want to check your sources on this. Canadian automotive manufacturing is just as unionized as American manufacturing, and Canada has been building cars in large numbers for almost a hundred years (i.e.: before there were US auto unions).

      1. Yes. I almost posted the exact same reply, but thought better of it. Bernard is right on the money. The CAW union is, in some ways, stronger than the UAW because Canadian law is generally more union friendly than US law.

  5. Swade is spot on, GM’s marketing is so dysfunctional that the company will allow millions/billions to evaporate in a poorly executed move like bringing Opel to Australia rather than take control and make the dollars and cents count.

    Opel (or Chevrolet or Cadillac or HUMMER….) can’t compete as a newcomer against the established GM brands in any given market and have it be an overall success for GM. Toyota doesn’t do that. Nissan doesn’t do that. Ford doesn’t do that, either. If you want to sell Opels in Australia, sell them as Holdens and be done. Vice versa, if you want to sell Holdens in the US, sell them as Pontiacs (successful) or Chevrolets (successful).

    How this ever came to be is a mystery.

  6. Opel, as a brand has no ‘presence’ in Oz. The dealer is just up from my house in Melbourne, freshly kitted out and looking smart and full of cars on the lot. Just finished last month, after a year of buying the place and doing it up. Which is sad as its local employees will now be in that all too familiar roller-coaster rider that is GM World-Wide-Competent-Decision-Making at its best.
    But SAABs are on the roads, in large numbers, old and new(ish) and in great condition too, keeping the brand presence alive to some extent. And no-one is really selling theirs at all now either…interesting, that.

  7. GM often marketed Cadillac/Saab/Hummer together here in the US too the last few years before Saab went bankrupt. The dealer six miles from my was a Cadillac/Saab/Hummer dealer.

  8. I think ‘astounding’ is the right word to describe this. But on the other hand it is General Motors we’re talking about, so one shouldn’t be too surprised.

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