Late 2012 was a rough time for the European arms of General Motors and Ford. In September of that year, the U.S. investment bank Morgan Stanley diagnosed GM with a case of financial gangrene and recommended the immediate amputation of chronic money loser Opel. The following month Ford announced the most radical production footprint restructuring by an automaker during Europe’s long recession: it would close assembly plants in Belgium and the UK, as well as shut down a stamping plant in Britain.
Fast forward to 2016 and things are very different.
Opel is confident this is the year that GM’s European operations will break even after more than a decade of losses.
Ford of Europe, which after three years of losses returned to profit in 2015 with the help of an accounting change, expects to once again become the money-making machine it was from 2004 until 2011.
The timing of each brand’s rebound in Europe is fortuitous because top executives at GM and Ford likely will need to put more attention into China, where sales have slowed, and South America, where losses are mounting. The comeback of Opel and Ford also puts additional pressure on rivals such as Volkswagen brand, which has been losing market share.
Ford of Europe says its share increased marginally to 8.0 percent last year, and that it rose to No. 1 in the unglamorous-but-lucrative commercial vehicles segment. It also is gaining traction in Europe’s fast-growing SUV segment. “Our SUVs were up 31 percent [last year] and in 2016 are expected to grow by about 30 percent to break the 200,000 barrier for the first time,” Ford of Europe President Jim Farley told Automotive News Europe.
Opel Group CEO Karl-Thomas Neumann told ANE that SUVs are “one of the shortcomings” at GM’s European unit because its only competitive model in the segment is the Mokka subcompact crossover. “I wish we had three more of those,” Neumann said. “That’s why we announced we will do a large SUV, which will be another very emotional, high-tech flagship for the brand.” It’s all part of Neumann’s plan to boost Opel’s market share in Europe to 8 percent by 2022 from 5.8 percent last year.