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Goodbye, Australian Opel

After exactly one year and one day after officially entering the Australian market, General Motors’ European brand Opel has announced on August the second it will be closing its doors in The Land Down Under effective immediately. It is not hard to figure out the reason for Opel’s tactical retreat, so the company hasn’t exactly been hiding the fact that they have sold only 1.530 cars by June this year, which is more than three times less than it was expected.

Opel

The Offer

GM had brought its German subsidiary Opel into Oz in August last year, but the actual sale had not started until the first of September. Their cars were sold in twenty dealerships, mostly multi-franchise corporations, some of which are already closed for business and their cars were sold. The offer included the Corsa City Car, Astra hatchback and Insignia medium car, and the Opel Zafira people-mover, their fourth model line, was to be introduced into the Australian market couple of weeks ago. Understandably, its promotion was cancelled. 
Prior to Opel’s arrival, senior management in Germany estimated the company was sure to have in the range of 15.000 annual sales by 2015, but they have sold only 989 cars this year. Opel planned to sell its cars as premium vehicles with a price to match, which for some reason simply didn’t take off as planned among Australian customers. 


The Reasons
According to Opel Australia spokeswoman Michelle Lang, the decision to close down Australian Opel was also handed down from Germany. That is not all that hard to figure out, since this hasty exit from the market means that Zafiras due to appear in stores a couple of weeks ago will have no home and that the Opel cars in stock will be sold at discount prices. The extent of Australians’ indiference to Opel’s cars is best shown in the fact that Carzoos, for example, one of the bigger web sites for selling used cars, does not even offer an option to select Opel when refining the search.


Bill Moth, head of Australia Opel, blamed a "tactical firestorm" produced by the increase in value of the Australian dollar and the fact that the Australian new-car market, featuring 66 brands (after Opel's exit) and widely regarded as the most competitive on the planet, seems to be driven by price reductions. In an official announcement, Opel Australia states that: "In order to be competitive, Opel Australia would need to follow recent competitor price reductions and significantly reposition the price of its core volume models. These changes, combined with the continued investment required to ensure brand awareness, result in a business which is not financially viable for any of the parties involved."


The Future
A handful of Opel’s Australian customers needn’t worry for their cars being left orphaned. Australian Trade Practices Law requires the car manufacturers to maintain adequate parts-supplies and honour warranties despite exiting the market. These obligations will most probably be handed down to Holden, GM’s Australian brand. As far the cars themselves are concerned, Opel announced the possibility of Holden selling some of their niche-filling models under new badge. According to Australia’s Drive, the most probable candidate for the badge-engineering is hot hatchback Opel Astra OPC, known in the UK as Vauxhall Astra VXR. Unfortunately for Opel customers, their cars are sure to take a huge drop in market value, since the brand simply doesn’t exist anymore on the continent.

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