Aussie Zafira backs GM's Opel commitment

Less than a year ago Opel was staring closure in the face, but last week parent company GM announced a $5 billion cash injection to keep it on its feet and now it has announced the closure of its plant in the western German city of Bochum.

At the same time, it’s getting ready to send a people-mover to Australia, a market not known for its love of MPVs. What gives?

The company’s official confirmation of a mid-year launch Down Under for its Zafira Tourer -- built, incidentally, at Bochum -- reflects the indirect but palpable benefit the marque’s Aussie arm will derive from GM’s $5 billion investment between now and the end of 2016.

The bulk of the money will go into the development and launch of no less than 23 new models and 13 new engines within the next four years.

The focus will be on Europe, where GM has clearly decided it needs a continued indigenous presence (it sells Chevrolet-branded vehicles there as well). On home turf, GM’s German brand is a volume player, selling more than 1.2 million vehicles in 2012.

It’s also been in big trouble for a long time, with Automotive News Europe reporting accumulated losses of $US18 billion since 1999.

The cash boost and the Bochum closure, the latter taking effect at the end of 2014, are part of what’s seen as a make-or-break strategy on GM’s part to get Opel out of the red by 2015.

Asked about the impact of the investment on Opel Australia, spokeswoman Michelle Lang echoed analyst sentiment that the investment is primarily about propping up the General’s all-important European presence.

“The investment will be focused on Opel's volume markets and product development in those regions, particularly Europe,” she said.

“While we don’t normally comment on global corporate announcements, what we can say is that it clearly underscores the continued and marked commitment by GM to Opel, and the fact that Opel in Australia is around for the long-term.”

Ms Lang declined to comment on possible effects the Bochum closure might have on local supply.

In Australia, Opel leaves the mass market work to local sibling Holden. That helps explain its confidence in re-entering the MPV niche with, local officials hope, several new models to come over the next year.

The company is looking to get its hands subsequently on the Mokka baby SUV and the svelte Cascada drop-top, but has reservations about Opel’s new baby, the Adam, due to the highly customisable MINI rival’s model complexity.

But conventional wisdom has it that people-movers don’t sell Down Under, where the Kia Carnival and Rondo, Honda Odyssey, Toyota Tarago, Hyundai iMax, Dodge Journey and, soon, Peugeot 5008, sell in relatively small numbers.

With around 11,000 sales in 2012, they occupy just one per cent of the local market, and Kia’s value-centric Carnival owns over a third of that niche.

The Zafira has been here before, bearing a Holden badge through the first half of the 2000s. Holden eventually withdrew it as buyers flocked to SUVs.

Asked how the local operation calculated the Zafira was worth bringing back, Ms Lang told motoring.com.au the decision was driven by dealer feedback.

“We were always going to be led by our dealer partners in bringing it back, as a stylish and versatile alternative to an SUV, with the value to make it a unique offering in this segment,” she said.

Opel Australia MD Bill Mott, who was heavily involved in the smaller Meriva’s release in Europe, has already confirmed the Zafira Tourer will arrive at a price point making it competitive with its nearest rival, the Odyssey.

No one’s talking pricing this early, but with the Odyssey starting at $37,100 plus on-roads, it’s a decent bet Opel’s offering will arrive with a sub-$40K base price.

Mr Mott told motoring.com.au the car is the right fit for the local arm’s long-term sales and marketing strategy.

“Opel in Australia is a niche brand not a mass volume player, and we expect that to be the case for some time. We always expected this to be a marathon not a sprint, and we are confident as we add to our product portfolio and continue to grow our brand awareness, so too our sales will grow. I think we have every reason to be very confident about Opel's future in Australia.”

It’s a strategy requiring patience -- something General Motors last week expressed on a wider scale with the announcement of a 4 billion euro ($5b) cash injection aimed at getting the German brand back on its feet.

Under the influence of GM’s US troubles and the European financial crisis, Opel has brought a world of pain to its parent company, incurring losses in the order of $US2.5 billion since 2009. The company’s fortunes have sunk with a one-third contraction in European market share, from more than 12 per cent in 1990s to less than eight per cent today.

As recently as last year, big-name US analysts and pundits were telling GM to cut its losses and ditch Opel, arguing it was distracting the beleaguered Detroit giant from the main game of getting back on its own feet.

Accused of fiddling around and neither committing to Opel nor dumping it, GM has now made its intentions clear.

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