Chevrolet Spain Dealers Surrender Unconditionally, Take GM Settlement Offer

MADRID – Nearly all of the 85 Chevrolet dealers in Spain have accepted settlement offers from General Motors following the automaker’s decision to pull the U.S. brand from the European market.

In January, Chevrolet Spain offered its retailers (including the 35 who also sell Opels) compensation of about €600 ($828) per vehicle sold annually, with volumes based on a 3-year average of 2010-2012 results, prior to the big downturn in 2013.

Dealers had until March 31 to agree to those terms, with GM cutting the payout offer to €400 ($552) per vehicle as of April 1 and to €200 ($276) from July 1-Sept. 30, after which the automaker’s settlement offer expires.

According to ANIACAM, the automobile importers association, dealers sold 22,961 Chevrolets in 2010, 17,523 in 2011 and 15,173 in 2012, for an average of 18,552.

When Chevrolet announced its offer, sources familiar with the dealer network estimated the maximum payout would bring each retailer €30,000-€180,000 ($44,000-$248,000) for a total outlay of €11.1 million ($15.3 million) for GM.

Dealers considered the offer too low, because some had invested €500,000-€1 million ($690,000-$1.4 million) in the franchise and collectively they would have to lay off an estimated 1,200 people.

But resistance to the settlement appears to have eroded quickly.

The 35 dealers who also sell Opel were first to accept the deal, concerned refusal to accept the offer could impact their Opel business.

In total, 82 of the 85 dealers agreed to the settlement by the initial March 31 deadline.

The quiet resolution in Spain comes in contrast to a more contentious situation in France, where a suit has been brought against the automaker in the Pontoise Commercial Court. According to French financial newspaper La Tribune, the suit was filed by the CNPA (the National Council of Automotive Professions), not by Chevrolet dealers in France.

CNPA has accused Chevrolet of not respecting the notice period for cancellation of contracts with its distributors in France and is demanding “new dignified and equitable cancellation conditions.”

The way Chevrolet announced its exit from Europe at the end of 2013 is widely considered as brutal for a brand that sold about 180,000 vehicles annually in the region.

After many years of justifying its launch in Europe as a world brand for GM, regardless of its overlap with Opel, the automaker cited cannibalization of Opel sales as the reason for pulling Chevrolet from the market.

Even if that’s the case, it would be difficult to blame Chevrolet for Opel’s poor financial performance, because the brand has been operating in the red for years.

At the launch of the new Opel Insignia earlier this year, Opel Spain General Manager Enrico De Lorenzi said he did not see many opportunities for increasing Opel sales as a result of Chevrolet’s exit from Europe.

“In precedent years, Opel Spain has not detected any reduction of its sales due to an overlapping of the Opel and Chevrolet ranges,” De Lorenzi said.

Opel dealers in Spain closed the 2013 financial year with a -0.6% profit margin, but De Lorenzi has expressed confidence in a return to break-even in 2014.