Opel could break even next year

Tue, 15 Apr 2014

How things change. According to a report from The Wall Street Journal, Opel might just break even next year. This is kind of a big deal, largely because Opel has been arguably the most troubled branch both in General Motors' portfolio and in all of Europe.

The report claims that Opel could be back in the black before 2016, thanks to the arrival of Karl-Thomas Neumann from Volkswagen, not to mention a massive, $6 billion investment that will lead to nearly two dozen new models in the next few years. Sales climbed for both Opel and Vauxhall by three percent in the first two months of 2014, according to WSJ, indicating that the renewed focus on product might be working.

"If everything goes well, theoretically [profits] can't be ruled out," Neumann told WSJ.

Opel's has seen success with the Adam city car and the Mokka (known to American audiences as the hot-selling Buick Encore), not to mention fresh, stylish versions of the Insignia (Buick Regal) and the Astra and Corsa small cars.

There has also been some cleverness to the markets Opel is targeting, which is encouraging. It recently pulled out of both Australia and China, suffering from low sales in both markets. But it seems that rather than a desperate retreat, these were more strategic withdrawals. According to Neumann, Russia and Turkey are Opel's two best chances for growth.

"Now Opel has a great strategy for China is what a lot of people thought, " Neumann told WSJ. "As GM, we are still bullish about China. But for Opel it is just a fact that our resources are better used somewhere else."

Based on statements like that, we're thinking the future is rather bright for the Russelsheim outfit.

By Brandon Turkus