Opel maps comeback as Chevrolet's shadow lifts
Marketing campaign will tout design, engineering and distinct features
Opel CEO Karl-Thomas Neumann: Market share has increased and new models and engines are planned.
GENEVA -- For the past few years, General Motors executives have fought a valiant battle in Europe on Opel's behalf, insisting that the brand was an upscale marque above mainstream Chevrolet, while fending off persistent rumors of Opel's sale or demise.
That battle is over. Opel is back to being GM's mainstream brand in Europe with the decision late last year to remove Chevrolet from the market, and Opel has the full backing of GM's new leadership. Now comes the hard part: revitalizing a faded brand that had lost market share for 14 straight years, before a slight uptick last year.
Opel is embarking on its largest ever marketing campaign in its home country of Germany, where Volkswagen outsells it by more than 3 to 1. The tongue-in-cheek campaign, dubbed "Umparken im Kopf," asks consumers to "unpark" their preconceived notions about Opel. For instance, a billboard advertisement jokes that 90 percent of men think red-haired women are more exciting, but 68 percent of them have never met one.
Opel's image makeover is crucial for GM, which is pouring $5.2 billion into its European turnaround effort through 2022. GM aims to stop losing money in Europe by 2016, a goal that has become even more crucial now that its mostly Asian international division, excluding China, has turned unprofitable amid pricing pressures.
Tim Urquhart, a senior analyst for IHS Automotive in London, says Opel falls into a "midmarket morass" of several brands fighting for market share, including Peugeot and Citroen. "It'll take inspired leadership and solid products to get Opel back on track," he says.
Leading that effort is Tina Mueller, 45, a German who joined Opel as chief marketing officer last year after spending 20 years in marketing for cosmetics companies, including for the Schwarzkopf brand, owned by German consumer-products giant Henkel.
Mueller says she took the job because it posed perhaps the greatest marketing challenge in all of Germany. "Many people were hiding the key in the pocket. They were not proud anymore of driving the brand," Mueller told journalists last week on the sidelines of the auto show here. "We had somehow to shake them up."
Opel chief maketing officer Tina Mueller: "Many people were hiding the key in the pocket. They were not proud anymore of driving the brand. We had somehow to shake them up."
The campaign hammers on two points: first, that Opel offers precision German engineering, a brand attribute that VW has in spades; and second, an emphasis on edgier designs and distinctive features, such as a rollout of GM's 4G LTE wireless service through OnStar.
Opel and its UK sibling brand, Vauxhall, will rely on their 5,900 dealerships and service centers to execute the turnaround, says Opel CEO Karl-Thomas Neumann, who took over one year ago. More than 900 of those stores also sell Chevrolet and are winding down those sales as GM prepares to withdraw the brand by 2016.
"We want the free floor space now made available for Opel, so the dealers invest in Opel and are confident that they can generate profit-making revenue on that floor space," Neumann said.
He cited several signs of progress. Opel's market share ticked up slightly last year, to 6.6 percent, on sales of 820,626 units. GM pared its European losses by more than half, to $844 million. Opel is launching 23 new or redesigned models and 13 new engines, including new diesel engines to replace uncompetitive ones.
Perhaps most important, Neumann said, is the renewed optimism of employees from GM's full-fledged support after years of uncertainty. One of CEO Mary Barra's first tasks when she took the job in January was to travel to Opel's Ruesselsheim headquarters, to pledge her support to the money-losing division.
"We have changed our attitude," Neumann said. "We are not the defenders and losers anymore. We are really on the attack."
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