Another GM brand failure; Opel killed in Australia

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GM has added another brand to its list of failures as Opel misses its first anniversary in Australia. On Friday, GM announced their German-based brand Opel was ceasing operations in Australia and would wind down their network immediately.

It’s always easy with the benefit of hindsight to say this was inevitable but you have to wonder the strategy and logic that supported the case to introduce another brand into an already crowded and depressed car market.

Opel’s Australia’s head of marketing and public relations, Michelle Lang blamed cut-throat competition in the small car market as the main reason for the decision to close.

Lang told The Age; “Astra is our volume driver, everything is just so competitively priced in that end of the market and we just can’t match that without cutting into our profits.”

In September 2012, car sales were not exactly booming, with well-established brands all fighting for a shrinking market share. The market never really recovered from the GFC.

The timing couldn’t have been worse. But the brand also lacked any real potency and relevance for Australians, other than to just be a cheaper alternative to a VW.

Bill Mott, Opel Australia’s Managing Director told the press in September 2012 that they wanted the brand to build their reputation on their German provenance.

“If you ask Australians – and we have – if you were to buy an imported vehicle which country would aspire that it came from and the answer is Germany by far and that’s precisely what we offer,” said Mott.

GM’s consumer insight seemed to assume that Australians would attribute aspirational brand status to Opel simply because they do other German brands, regardless of the fact that other brands have built this reputation over many decades.

To be fair, Opel tried with the adoption of their German tagline “Weir Leben Autos” and the connection to the Astra (previously sold in Australia as a Holden) but that may have confused the market even more.

In the end, Opel failed to build credibility and truly leverage German engineering brand traits.

Most Australians didn’t see the value in a German GM. Only 1,530 vehicles were sold by the end of June this year. In comparison, Volkswagen sells more than triple this this each month.

Opel follows a number of GM brand executions in Australia in recent years, including the Hummer, Daewoo and the shelving of plans to introduce Cadillac.

Michael Hughes
Strategy Director and Partner

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