Opel Pulling Out of Australia After 12 Months

Adam Opel’s great adventure Down Under has ended a year after it started.

The General Motors’ European brand immediately is ceasing operations in the fiercely competitive Australian market and winding down its dealer network.

“To be competitive, Opel Australia would need to follow recent competitor price reductions, and significantly reposition the price of its core volume models,” the company says in a statement.

“These changes, combined with the continued investment required to ensure brand awareness, resulted in a business which is not financially viable for any of the parties involved.”

Opel says it will begin an analysis with GM Holden on the potential for future Holden-badged niche products sourced from Opel Europe.

The German-made brand launched its Australian operation in August 2012 with a head office team of 15 working out of GM Holden’s headquarters.

Opel’s 20 dealerships sold 541 vehicles before year’s end and delivered another 989 units in the first six months of this year. The results were far short of projections made in 2011 of 15,000 sales annually by 2015.

Opel’s entrance into Australia was considered unworkable from the start. The brand was intended to be a more upmarket European alternative to the mainstream GM Holden models, but analysts said the two could not avoid competing with one another.

The Age newspaper says the Opel Astra, for instance, is seen as a competitor to the locally built Holden Cruze. Two models share many mechanical components.

But competition likely was the biggest factor. Australia has 60 brands fighting for a share of a 1 million-unit new light-vehicle market, making it difficult for a newcomer to make its mark.

Opel Australia says it is working closely with employees, dealers and suppliers to carry out the closure in an orderly and responsible manner. “As always, customers are of the highest priority, and Opel Australia will remain in close contact with them to ensure all on-going obligations to these customers are met.”

GM Holden is expected to service the vehicles Opel has sold in Australia.

Michelle Lang, marketing and public relations chief for Opel Australia, tells The Age the cutthroat competition in the small-car market is the chief reason the brand has decided to end operations.

Noting the Astra is Opel’s volume driver, Lang says cars in the segment are priced too low. “We just can't match that without cutting into our profits. It's commercially not viable for us to compete at that level.”