The Marriage of Opel and Buick for GM
Over the next few years, GM is changing its concept for some of the Buick lineup here in the US to partner with its Germany counterparts in Europe under the Opel name. The goal is to have chassis, power trains, and other interior parts that are the same, but simply under different skins.
While the Buick brand can stand alone in the US, combining the two for the European market is meant to drive Buick lovers to the Opel brand and allow the Opel cars to shine. Having lost over $18 billion since 1999, it’s time for a new and fresh start with Opel and a marriage with one of GM’s strongest brands just might do the trick.
Conversely, Buick is now faced with some aging models in need of retooling and redesigns specifically the Regal and LaCrosse; because of this need, now is the perfect time to start a project like this and have different cars with different names on them and the same parts underneath. Of course this is not a new concept at all, however a rekindling of an old one.
In addition to the timing of the retooling, the recent announcement to pull Chevrolet out of Europe opens up new and unique possibilities for both the Opel and Buick brands. Car lovers in Europe who enjoy the GM engineering of a Chevrolet can still find what they want in the Opel models.
GM plans to make this transition work by having the basic design done in the US in Warren, Michigan with the final work being done in Germany and Shanghai. The German plant would put out the Opel models while the US and Shanghai plants are sending Buicks off the line, all with similar parts under the hood, but different exterior designs.
By doing this, GM will effectively marry the two brands together and reduce the production costs overall of both brands. This allows GM to have a much stronger price structure and offer many vehicles under both names using the same parts to get the job done.
Even though the Buick brand had strong results last year, and increase of a 16 percent through August, the brand mainly rode the Enclave and Encore crossovers to this success. That being said, there was a surge in demand for Buick in the Chinese market that was much greater than that in the US, which will help solidify the reasoning to ensure the new models are launched in the Shanghai market early.
The goal of GM is to have the Buick/Opel partnership merged completely by 2020 with new and exciting models coming off the line in the US, Germany, and China. With this new launch, GM hopes to pass the market share in Europe that is held by Volkswagen and Ford, making GM currently third with the Opel brand.
The combined branding of these two brands is an aggressive and sensible decision by General Motors. Production and tooling costs will greatly be reduced by both brands allowing for an incremental increase in profits and at a much lower cost to the company. This is a strategy worth watching as it unfolds, and it would not be surprising to see other auto makers follow suit once success is realized by GM.