Handelsblatt Exclusive

GM Chief Stands Behind Opel

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Mary Barra and the new Astra.
  • Why it matters

    Why it matters

    General Motors is banking on its new supercharged Astra to boost profits and open new markets.

  • Facts

    Facts

    • GM has developed a new model Astra to be unveiled at this week’s International Motor Show
    • The Astra and Corsa are Opel’s two top-selling models.
    • GM plans to introduce 29 new models for Opel from 2016 to 2020.
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  • Audio

    Audio

  • Pdf

Mary Barra, the chief executive of American car giant General Motors, is committed to reviving its ailing European business Opel, she told Handelsblatt.

The company is pinning its hopes on a new Astra model, which would be at the heart of Opel’s new strategy. The new model is being launched at the  International Motorshow in Frankfurt, which opens to the public on Thursday.

“It’s a very important debut for our company. It’s also a crucial point for Opel,” she said.

She added that Opel, which has gained market share in the last two years, “is a very important part of General Motors,” and that she expected it to move back into profit next year.  Opel will now introduce 29 new models from 2016 to 2020.

“We are now very effectively communicating what Opel stands for. I am very confident that we will reach our goals for next year and the years after that,” she added.

Ms. Barra said she had already received 30,000 advance orders for the new Astra, which she said would have “many innovations in the car are normally available only in the luxury segment.”

GM has struggled to gain market share in Europe and said two years ago that it will drop its Chevrolet brand in Europe to focus on Opel. Ms. Barra said she now wanted to focus on profitable growth, rather than solely focusing on market share.

“Electric cars are still too expensive for many buyers”

Mary Barra, GM chief executive

“In the last few months, we have made many decisions about where we, as General Motors, want to do business, and where it doesn’t make sense for us,” she said.

General Motors tends not to take part in rebate programs, that boost market share at the expense of profits.

Ms Barra said the company’s sales and profit margins have both improved recently.  “So I would say that we did make the right decision.”

Ms. Barra also said she wanted to rebuild GM’s iconic Cadillac model as a luxury brand. “Cadillac should still represent true luxury. And we are working very hard to make sure that customers see it that same way again. In China, for example, Cadillacs are selling very well again,” she said.

GM has also stepped tentatively into the electric car market with the Chevrolet Volt in the U.S. or the Open Ampera in Europe, but said costs were still a hindrance.

“Electric cars are still too expensive for many buyers,” she said, but added that electric mobility  “will play an enormous role in the future.”

GM unveiled a new electric car Bolt in Detroit at the beginning of the year with a price tag of around $30,000 (€26,540) but the car is not yet available in Europe.

GM is also focusing on networking their cars, starting with its OnStar system, in which the vehicle automatically reports its status to the manufacturer. Seven million people already use the system. The new Astra will also incorporate OnStar.

The company is also developing driverless cars and will next year unveil two Cadillac models where drivers can take their hands off the wheel while on the highway.

GM also has joint ventures with Google, to incorporate smartphones into cars.

Ms. Barra was less keen to talk about GM’s other options: a possible tie up with Fiat Chrysler. The Fiat Chrysler chief executive Sergio Marchionne had made it clear he would be interested in a merger, or a hostile takeover, but Ms. Barra refused to comment on the record, saying only: “We focus on our shareholders. And in our view, the best approach for them is that we implement the plan we have developed.”

 

Lukas Bay is an editor with Handelsblatt’s companies and markets desk. Grischa Brower-Rabinowitsch heads Handelsblatt’s U.S. editorial coverage out of New York City. Christian Schnell is an editor with Handelsblatt, covering the stock market and German auto industry. Meera Selva, an editor at Handelsblatt Global Edition, contributed to this article. 


Video:  GM CEO, Mary Barra, visits the Opel booth at the IAA 2015.

To contact the authors: bay@handelsblatt.com, brower@handelsblatt.com and  schnell@handelsblatt.com

 

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