Investing for success

Opel-Vauxhall’s chief explains how the OEM plans to grow its sales with more efficient, better connected SUVs even when the market remains challenging

Growing the market share of any business is a challenge. But in the automotive industry it requires an OEM to juggle the need to invest in new technologies and vehicles with changing consumer demands and wider economic megatrends. 

Which is why every day that Opel-Vauxhall’s chairman Dr Karl-Thomas Neumann arrives at his offices in Rüsselsheim, Germany, he is faced with many challenges.

The OEM has met some of them by investing in new powertrain technologies which have helped to reduce carbon emissions in vehicles as diverse as the A-segment Adam and Karl/Viva hatchbacks and the latest-generation compact Astra. Principally this has been achieved through the introduction of three-cylinder gasoline engines – in both naturally aspirated and turbocharged forms.

And Neumann is impressed with the downsized powertrain’s application, especially in the Astra. “We have the best three-cylinder gasoline engine in the market,” he says. “It’s very efficient, emitting 96g/km CO2. But we also have diesels which are quiet and refined, the best of which emits 90g/km CO2 – that means 3.4 litres/100km, which I think is impressive in such a car.”  

There are sure to be further developments to the firm’s three-cylinder engine technology, and Opel-Vauxhall continues to improve its transmission systems too. And, while the success of the Ampera range-extender hybrid was limited to the extent that the second-generation technology won’t be launched in Europe, electrification will remain an important tool for improving efficiency.

But investment in any new technologies can only take place if buoyancy in the market keeps sales growing, generating the necessary funds. And this hasn’t been the case.

Neumann says: “The European market is growing but slowly, which is disappointing. Russia is taking away a lot of the growth because it collapsed, so there’s still a lot of room to make up.” 

At this point it could become a chicken-and-egg situation: do you wait for the market to recover before investing in new vehicles, or do you invest in new vehicles in order to help grow the market?

The introduction of the Adam has been a huge success in Neumann’s eyes, and, although it can’t compete with the Fiat 500 in all regions, sales have been strong in Opel-Vauxhall’s domestic markets of Germany and the UK. But small hatchbacks aren’t the growth area that Neumann necessarily wants the OEM to pursue. “What’s clear is that we need to move more into SUVs and crossovers, and that’s what we’re doing,” he says.

The firm already has the B-segment Mokka and the compact Antara – which Neumann is refreshingly honest about, saying it has been a disappointment – but the number and range of vehicles will grow in the future.

“Mokka is just the start,” he says. “The MPV segment is shrinking, and we said let’s redesign these cars, consumers want to sit a little higher, they want the utility, the room, but also the lifestyle.” 

tags: December 2015 Opel Vauxhall Design