Current production volumes are not high enough to return General Motors Europe to profitability.
GM sales in Europe continued their decline during the second quarter, even though car scrappage programs provided a strong boost to the market. Overall GM sales were 471,823 vehicles, which equaled a share of 9.2% of the market. GM sales were down 20% in the region, compared to a decline of 18% the industry. This share is consistent with GM’s year-to-date trend, but the current volumes are not high enough to make GM Europe profitable.
“While it will probably take some years for the industry to return to 2007 levels, as we are facing an unprecedented set of economic challenges due to the global economic crisis, we are working intensively with our retail network to fight for every sale and to successfully manage the business during this challenging period,” said Brent Dewar, GM Europe vice president, sales, marketing and aftersales. GM had previously estimated five years for a European recovery.
Final numbers from the European Automobile Manufactures Association will not be available until next week. But it appears that GM’s marketshare is now the same as Ford’s in Europe — a prospect it soon faces in the U.S. since it is phasing out four brands that comprise more than 4% of its 20% market share here, which will bring it close to Ford’s share.
VW remains the clear market share leader in Europe at about 12%, followed by Ford and GM, then Peugeot and Renault both at 6.9%, and finally Fiat at 7.5%.
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The latest setback comes as GM is in final negotiations to sell its loss-making Adam Opel GmbH subsidiary, which is key to it future vehicle development plans. One sticking point appears to be GM’s insistence that it have the right to buy back controlling interest in the company that goes back to the 19th century.
Opel is operating on a €1.5 billion bridge loan agreement with the German government as discussions continue. Insiders say time is running out as the cash dwindles. Opel is operating at about a 7.7% share across Europe.
GM is also poised to exit bankruptcy in the United States at any time now. However, GM’s core issues of weak and declining sales, and idled factories will haunt the new General Motors Company unless it can quickly turn things around. Prospects for a global economic recovery remain discouraging for the balance of the year.
Opel/Vauxhall sales reached a volume of 347,330 vehicles from April to June 2009, with an estimated share of 6.8%. Sales in Germany were up 45%, making Q2 the best sales quarter since 2000 for Opel. The Opel Corsa was the segment leader in Germany in the second quarter. This positive trend was clearly aided by Germany’s scrappage program that boosted sales in the biggest economy in a devastated European market.
Chevrolet sold 115,526 cars in Europe in the second quarter, with a record market share of 2.3%. Chevrolet did well in Germany (+43%), France (+102%) and Turkey (+120%) on an admittedly tiny base.