General Motors is tossing in the towel in Europe for Chevrolet, leaving the market there except for the widely acclaimed Chevrolet Corvette and an expanded presence for Cadillac as its premier brand.
Starting in 2016, GM says it will rely on its Opal and Vauxhall brands to compete in the volume market and that the Corvette and other “select iconic vehicles” will remain available in Western and Eastern Europe as well as Russia and the Commonwealth of Independent States.
In a press release Thursday, GM blamed the withdrawal on a “challenging business model and the difficult economic situation in Europe.”
Cadillac will also expand its presence in Europe with a focus on its distribution network and new product introductions over the next three years.
GM Chairman and CEO Dan Akerson said Europe is a key market for GM that will benefit from a stronger Opel and Vauxhall and further emphasis on Cadillac.
“For Chevrolet it will allow us to focus our investments where the opportunity for growth is greatest,” he said.
He called the decision “a win” for all four GM brands and “especially positive” for car buyers in Europe because they will be able to buy vehicles from “well-defined and vibrant GM brands.”
The move will improve the Opel and Vauxhall brands, GM says, and cut the market complexity associated with having Opel and Chevy in Western and Eastern Europe. The brands are competitive in their respective segments because they are clearly defined and distinguished in Russia and the CIS.
GM posted a $214 million loss in the third quarter of this year in Europe.
The move will affect earnings for GM in the last quarter of 2013 by as much as $1 billion, GM says, as well as 2014 earnings.