News: Can GM's new plan save Opel?

In a week when rumours once again surfaced that Opel was up for sale to PSA Peugeot Citroen, the German firm's US masters at General Motors have come up with (another) new plan to turn around the loss-making car company.

Interestingly, GM Europe boss Steve Girsky admits that this is the first Opel turnaround programme "not to include hope as part of the package" and the 10-year plan centres on cutting costs (Opel needs to get its fixed costs down by about €500-million, and make around €1-billion of savings in its parts-and-platform sharing agreement with PSA) and to introduce 23 new models (along with a bevy of new, more efficient engines) by 2022. The plan, rather playfully, is called Drive! 2022. 

If everything works, Opel will hit break-even in a couple of years and move back into profit by around 2018. Some of the plan has already been implemented; the tie-up with Peugeot and Citroen is already well progressed, the decision to close the loss-making factory in Bochum has already been taken and several key new models, including the Astra saloon, Adam city car and Mokka compact SUV, have already been introduced.

Opel actually had quite a good year in 2012, finishing up as Europe's third best-selling brand and going a long way to winding down stocks of unsold models. Next up will be to start building non-Opel-badged models in Opel's German plants, to take up the slack in capacity. Expect to see Buicks for China (China is now a massive market for this classic American brand) and mechanically-identical Chevrolets for Europe built in Russelsheim and elsewhere. And, although the plan doesn't overtly admit it, expect too to see the next-generation of Citroen C5 and Peugeot 508 built on a common platform with the Opel Insignia in Germany.

News: german government may subsidise electric cars

 

Angela Merkel's government is considering a dramatic increase in the subsidies for buying an electric car, as German buyers continue to shun plug-in vehicles.

The German car market (although it dipped dramatically in September) was a healthy 2.1-million vehcile sales so far in 2012, but just over 2,000 of these were electric cars – 1 0.1% market share, and this despite Chancellor Merkel's previously stated goal to have one million electric cars on German roads by 2020.

Neighbouring France already gives electric car buyers a €5,000 kickback, and the Merkel government is mulling other options, such as a 10-year exemption from road tax. But recent developments, not only a falling car market and reduced consumer sentiment (which will make buyers more conservative and less likely to spend money on a battery car) but also Toyota's announcement that it's going to shun all-electric vehicles in favour of plugin hybrid development, will not make Frau Merkel's task any easier.

Any subsidy, if decided on, won't kick in until the back end of next year at the earliest, but Mercedes CEO Dieter Zetsche reckons that without it, the maximum possible market in Germany for electric cars is a mere 600,000 units.