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Opel to shed upscale pricing in effort to win back core customer

Thu, 21 Jun 2012

Opel/Vauxhall is reversing its upscale pricing strategy and will make its cars more affordable to win back buyers, CEO Karl-Friedrich Stracke said.

"We need to regain our traditional customer base," Stracke told the Automotive News Europe Congress in Monte Carlo on Thursday. "We moved Opel up too quickly. Going forward there will be adjustments to make our cars more affordable."

Stracke also said the General Motors unit will not reduce investments in new products despite Europe's debt crisis.

"We will make a significant investment in Opel's product portfolio. I noticed with interest that some of our key competitors have announced plans to cut product investment spending," he said.

Fiat CEO Sergio Marchionne said last week that the Italian automaker is cutting product development investments by 500 million euros {$630 million at current exchange rates].

Stracke reitereated Opel's plan to introduce 23 new or refreshed vehicles between now and 2016, including cars in new segments for the brand such as the Mokka subcompact SUV and Adam minicar. The brand will also introduce 13 new powertrains including three new engine families.

"Product is king and the key to future success" Stracke said.

The product offensive will be combined with new sales strategies aimed at Opel regaining traditional customers and attracting new buyers, the CEO said.

Stracke said his aim was to return Opel to sustainable profitability but he could not give a timeframe in the current economic climate.

Measures to make the brand profitable will include improving capacity use in vehicle assembly plants, improving production efficiency, leveraging GM's global organization and finding synergies from the alliance between GM and PSA/Peugeot-Citroen.

Stracke said Opel's pricing strategy will not bring the brand into competition with sister GM brand Chevrolet. "Customers don't see the brands as competitors," he said.

By Paul McVeigh- Automotive News Europe