General Motors to drop Chevy brand in Europe to focus on Opel
FRANKFURT - Reuters
US auto giant General Motors said on December 5, 2013 it would largely withdraw its Chevrolet brand from the European market by 2016, citing the "difficult economic situation" on the continent. AFP Photo
General Motors (GM.N)
will drop the Chevrolet brand in Europe by end 2015, and focus its
resources on pushing its Opel and Vauxhall brands, the latest effort by
the U.S. carmaker to turn around its European operations.
The company's Chevrolet brand
will no longer have a mainstream presence in Western and Eastern Europe,
largely due to a challenging business model and the difficult economic
situation in Europe, General Motors said on Thursday.
have growing confidence in the Opel and Vauxhall brands in Europe. We
are focusing our resources in mainstream Europe," Stephen J. Girsky,
Vice Chairman at General Motors, said on a call with journalists on
Chevy's sales volumes in
Europe have barely budged, hovering around 200,000 cars ever since GM
relaunched Chevy in Europe in 2005. Hurt by a brutal downturn in
European demand, Chevrolet responded by slashing prices and introducing
more upmarket models - putting it on collision course with its sister
By shutting Chevy,
General Motors expects to record net special charges of $700 million to
$1 billion primarily in the fourth quarter of 2013 and continuing in the
first half of 2014, Girsky said.
this amount, $300 million of net special charges will be non-cash
expenses. These charges include asset impairments, dealer restructuring
and severance related costs.
addition, GM said it expects to incur restructuring costs that will not
be treated as special charges, but will impact GM's international
operations earnings in 2014.
The decision to drop the Chevy brand is not influenced by a partnership General Motors has with France's Peugeot (PEUP.PA), Girsky said.
"This is done independent of the PSA relationship," he said.
(we will) shut away the 1 percent share company in Europe. The
financial results have been unacceptable," he said, referring to
Chevrolet's market share in Europe.
Thomas Sedran, President of Chevrolet Europe, said, "Chevrolet's business results have been impacted by the unfavourable economic environment in Europe."