Opel Australia aims high: 15K by 2015

GM's German brand wants to be the biggest European Down Under behind VW

The global boss of Opel has set an ambitious sales target for General Motors' German brand in Australia – more than a year before the first showroom opens.

In an announcement that was as much a surprise to Opel Australia executives as it was to journalists, Karl-Freiedrich Stracke, asked to clarify volume forecasts, told a roundtable meeting at the Frankfurt motor show overnight:

"I can give you a rough number right now. It's 15,000 that we start from, and then we want to grow from there.

"We will not sell 15,000 immediately. We will grow dealerships, and as we grow, dealership volume will grow as well. We have basically a phase in, and maybe after three years [2015]… We have 15,000 sales."

Opel Australia executives had been trying to keep the company's sales aspirations under wraps for competitive reasons – and to avoid ridicule if that figure is not reached – but Stracke confirmed the target four times.

Opel's target of 15,000 annual sales after three years is ambitious given other European brands with a longer history in Australia – and therefore greater customer awareness – sell a fraction of that number of cars games.

Renault, with a 60-year history in Australia, planned to sell in excess of 20,000 vehicles annually within five years when it was re-introduced with factory support as part of the Nissan alliance in 2001. In 2006 Renault slashed that target to 7000 annual sales by 2011, but will reach only half that based on year-to-date results.

Indeed, in the past 10 years Renault has not reached even a quarter of its initial target of 20,000 sales; its best result under direct company control was 4656 sales in 2002 – and it has only eclipsed 3000 sales in a calendar year four times.

Peugeot, established in 1949, only one year younger than iconic General Motors Holden, has averaged fewer than 7000 sales annually over the past 10 years.

Citroen, the oldest uninterrupted automotive brand on sale in Australia, having been established here 88 years ago (in 1923) and the maker of the first automobile to be driven around Australia (in 1925), has sold an average of 2300 cars annually over the past 10 years.

Stracke conceded he was not aware of Renault's struggle in Australia despite its factory support and ambitious sales targets established 10 years ago.

However, Stracke and his Opel colleagues pointed to the phenomenal growth of Volkswagen in Australia over the past decade, from 11,000 sales in 2001 to a record 38,000 sales in 2010. Volkswagen sales have almost quadrupled in a market that has grown by one-third.

Stracke says Opel will need to work hard to create awareness for the relatively unknown brand in Australia, but believes 15,000 sales is a "realistic" target.

"I know the [Australian] market quite well," he said. "In my previous job I was [vice president] for engineering … so I was visiting Australia quite frequently."

Stracke said Opel was absolutely committed to a long term future in Australia and there were no plans to pull out at the 11th hour, as Holden did with US luxury brand Cadillac in the wake of the global financial crisis three years ago.

"This is a long term commitment we're after," Stracke said.

"When we do something, we want to be doing this in a sustainable way. We don't just want to look at one year or two years or five years."

Stracke said exports, while not crucial to the survival of Opel, would help the German division's bottom line.

Exports currently account for 2 per cent of Opel's total output (30,000 of 1.3 million forecasted sales in 2011) but the company wants to increase exports to 7 per cent of its total output (100,000 of 1.4 million sales) in the next five years. Australia is key to the plan.

"Australia is a very important market. And we will see how quickly we can ramp up," Stracke said.

"We want to grow, that's why we are exporting to Australia and other countries.

"It's very helpful if you have export markets. That improves your financial situation and you can load more volume into your [factories] and your break-even point is continuously coming down.

"We have still free capacity in [Opel factories in Europe] and as soon as we can utilize more volume… it's much improving the cost per car."

As reported earlier, Opel plans to launch in Australia in November 2012 with three models – the Corsa small car, Astra hatch and wagon and Insignia mid-size sedan.

But at least two more Opel models will arrive the following year, possibly a compact SUV and a city runabout, dubbed 'Junior' internally.

Despite Opel introducing 30 new models in the next three years, former Holden boss Chris Gubbey, now vice president of international operations for General Motors Europe, said it was not Opel's plan to "poach" Holden customers.

"We're not targeting the same customer base… We don't want to tread on Holden's space. It's no advantage for us to go in and poach Holden customers and there's no intent to do that," Gubbey said.

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