Ken Gratton•10 Aug 2013

NEWS

Opel: it seemed like a good idea at the time

General Motors Euro-brand's brief foray into the Australian market is not without precedent

Comment

Car companies come and go; but few can rival Opel for its fleeting presence in the Australian market.

Within 12 months of Astra supply to Holden drying up the German GM brand was rumoured to be preparing for an assault on the local market with a range of vehicles all wearing the Opel badge. By January 2011 the company formally announced it was on its way here.

During the second half of 2012, the company began selling its products through a local dealer network. Despite a high-profile marketing campaign, the company sold just 541 cars in 2012, with a further 1100 this year. That's a far cry from the 15,000 units the company hoped to be selling locally by 2015.

It's common for a start-up to wear a loss or at least endure lower-than projected sales while building the brand and establishing a viable sales base. Opel set a new record though, folding within its first year of operations.

But Opel's rout is not unique. The history of the Australian market is littered with names that failed (and in some cases rebounded).

Renault is making strong progress now, but at the end of the 1980s it was dropped by its local distributor. Within a few years, another distributor attempted to revive the French brand, but struggled with the factory's laissez-faire attitude to uniquely Australian specifications that had to be factored into tiny production batches. An abortive joint venture with Volvo followed, but ended in 1996.

Renault returned to the country in 2001, with local support from Nissan – after five more years in the wilderness. This time around the factory's much more supportive. But re-establishing the brand here has taken much longer than might have been the case if the manufacturer had not just thrown in the towel back in the mid-1990s.

Renault's by no means the only European brand to find the going tough in Australia. Fiat left here after attempting to sell the half-baked Regata and Croma models, which failed to make much of an impact.

Ateco resurrected the brand here in 2008, just as the GFC was beginning to bite. Distribution has since been transferred to the factory, which has focused its efforts on improving the value for buyers, rather than positioning the brand further upmarket than is actually warranted. So far the signs are encouraging.

A Fiat in all but name, the Niki 650 was a Polish-built Fiat 126 that sold at the extraordinarily low price (even in 1989) of $7999. Four years later the price had come down to $5999 and the local distributor still couldn't sell it. It's testament that there are some cars Australian buyers won't accept, even below a bargain basement price point.

Another brand from the former Warsaw Pact nations was Lada, which hailed from the Soviet Union.

Lada’s claim to fame is that it was prepped by Peter Brock's HDT operation in Port Melbourne – after his split from Holden in 1987. Lada brought in various derivatives of the Fiat-based Samara hatch (which was alleged to have been Russia's version of the first-generation VW Golf), but if there's any fondness at all for the Lada name in this country, it's for the tiny, but robust and go-anywhere Niva, a four-wheel drive wagon that was long on practicality, short on build quality.

Leaving the European brands for a moment, consider Dodge. Once a nameplate applied by Chrysler Australia to its commercial vehicles, the Dodge brand was revived in Australia during the ill-fated DaimlerChrysler period. At various times the Nitro, Caliber, Journey and Avenger have enjoyed moderate success, but it was never an outstanding success or over a longer period. The brand continues in the US, but only the Journey (now badged Fiat Freemont) remains on sale in Australia.

Dodge, with its roots in Chrysler takes us to that other American brand – the one that gave up manufacturing in Australia at the start of the 1980s. At the time, Chrysler was selling multiples of Sigma for every Valiant it built, but Valiant production was actually more profitable. The sales success of the Sigma drove Mitsubishi to pick up the SA facilities from Chrysler when the American brand was struggling financially.

After developing and building the award-winning Magna here (and seeing it emulated by the parent company subsequently), Mitsubishi introduced the 380, which could not match its predecessor's early commercial success. Eventually, after four years and some undercooked updates, the 380 was quietly axed, taking with it the assembly facilities and making Mitsubishi a full-line importer.

It begs the question... what might have happened if Chrysler had entered into a joint venture with Mitsubishi here, rather than just flog the lot to its Japanese subsidiary.

Another Japanese company that showed signs of promise but was eventually withdrawn from the market was Daihatsu. According to company insiders at Toyota Australia, the build quality of the Daihatsu cars never quite met their standard. On the other side of the fence, it's argued that Daihatsu's range of compact SUVs, commercial vehicles and light and small passenger cars represented too much of a threat to Toyota's sales dominance in those segments.

In 2005, its last full year on sale in Australia, Daihatsu sold just over 5000 vehicles, which is considerably better than many European brands achieved last year.

The brand will be remembered for a raft of quirky models, including the tiny Copen, the Panda-driving Pyzar and the very upright and narrow-gutted Move. But there were some well-regarded models as well, such as the Sirion, the G100 Charade and the Rocky SUV.

Daihatsu seems like a victim of circumstance, but other companies are more like Opel – brands that didn't appear to do their market research thoroughly.

Coincidentally, at least a couple have long-standing associations with GM. Saab needs no introduction; nor does Hummer. And let's not even discuss Cadillac, which didn't even officially launch in Australia before Holden's MD at the time, Mark Reuss, pulled the plug on it.

In the mid-1980s Saab saw a significant uplift in sales when the Aussie dollar took a dive off a cliff. Saabs offered value at a time Aussies could not afford much in the way of European prestige. And, in fairness, those Saabs were regarded as durable and safe.

After GM took control of the failing Swedish brand, they milked it for its technical innovation – and some of that IP is still owned by GM, which is why they wouldn't allow a Chinese company to re-commence manufacture of the last generation 9-5.

Under GM's ownership, the Saab brand fell into disrepute and the engineering-focused management at Saab found itself frequently at odds with GM's cost-conscious marketing-lead leadership.

Compromises were made and the brand was damaged through exercises such as the 9-2X, which was a Saab-styled Subaru WRX sold in North America only. Whatever money GM made from selling the 9-2 (and we're guessing it wasn't much, since it only remained on sale in the US for two years) it probably did not meet the cost incurred by the damage it did to the brand worldwide.

Reliability problems drove buyers away from Saab and its post-GM revival in Australia always looked like a rushed effort to find revenue from any market possible.

Saab dealers in Australia had encouraged the return of the brand, arguing that there was a market here. But the damage had already been done by its earlier withdrawal from Australia, with Holden left to mop up the mess.

The company announced its return to Australia in February 2011, but was officially placed in the hands of administrators less than two years later. Just 150 cars were sold in 2011, and only 27 the following year.

Hummer was launched here with much fanfare late in 2007. The H3 model, which was the only type to be sold in Australia, was built in the US and shipped to South Africa where it was reassembled in RHD form. For the full year 2008 the brand sold 1078 vehicles in Australia, with 429 sold in 2009.

In 2010, as demand dried up and GM faced its own financial demons at the height of the GFC, the parent company began to cast around for a buyer to take Hummer off its hands. Eventually the off-road brand was sold to a Chinese concern. In Australia 55 units were sold in 2010 and the final three cars in stock trickled out the doors in 2011.

The examples of companies and products that just didn't hit the intended target in Australia go on and on. Names like Noble and Pagani, for instance – distributed here by MG Rover Australia before that distributor went belly-up – or Seat, Volkswagen's Spanish brand. Daewoo was sacrificed by Holden for the expediency of furnishing cheap light and small car models under its own brand, to compete with other Asian offerings.

Tata is making a return, but did you know that the Indian brand has marketed commercial vehicles here in the past? And Mahindra, another Indian brand, first appeared here in the 1990s, selling a diesel-engined World War Two-era Jeep built under licence. That vehicle was only sold to mining companies in Western Australia at the time.

Another Jeep-like vehicle was the Asia Rocsta, which is fundamentally an updated Jeep built by Kia, but sold in Australia under the Asia Motors banner.

I think I've seen two on the road.

With so much history of failure to recount, what do we make of brands like Proton, Chery, MG and Infiniti? The Nissan prestige brand seems to be here for the long haul, but I would have said that about Opel...

Proton has been struggling to make much of an impact in Australia for literally decades. Paying over the odds for mediocre build quality and designs that first saw the light of day in Mitsubishi dealerships years earlier seems an unlikely product strategy. But they're still here.

Chery can't even sell cars in Victoria, Australia's second largest state by population. That's a consequence of entering the market without stability control. Such an oversight doesn't bode well for Chery's future. In fact, it seems that of all the brands that have reason to fear the impending flood of imports from China, it's probably the first wave of Chinese brands that have the most to fear. The Japanese, the Koreans and the Europeans are already shifting upmarket before the wave starts lapping around their feet.

Lastly, MG...

Sorry, but there's nothing further to say at this point other than this: How likely is the success of a company offering small but overpriced passenger cars in a country where the brand was once known for its appealing soft-top sports cars?

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Opel: it seemed like a good idea at the time

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