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IFWC Review: Opel-Vauxhall and its international fleet proposition
The last few years have been somewhat of a rollercoaster ride for GM’s Opel/Vauxhall brands in Europe. Buffeted by the economic crisis, the previously loss-making division came within an inch of being sold off by parent GM, which withdrew from a deal with Canadian-Austrian auto parts maker Magna at the last minute. Instead it embarked on a drastic restructuring to get the unit back on track.
Even though the brand is still dogged by speculation of a possible sell-off by its parent, latest indications are that GM’s efforts are paying off. Opel lost $1.6 billion last year, but Vauxhall is set to break even in 2011 and will make a substantial three-digit million euro profit in 2012.
First-half results for this year are already looking encouraging. For the first six months, vehicle sales grew 8.2% compared to H1 2010, with over 659,000 Opel and Vauxhall cars delivered, while market share was up from 6.2% to 6.4%.
Out of the product portfolio, Meriva and Astra Sports Tourer are particularly successful, with both taking the number one position in their particular vehicle segment. Opel also says it’s running extra production shifts and has shorted the summer break at its Rüsselsheim plant, where the Insignia is built. And, due to the high order intake for the Astra and Insignia, Opel has increased diesel engine output in Kaiserslautern from 180,000 to 250,000 per year.
Alain Visser, vice president sales, marketing and aftersales, said: ‘Our new models, led by the Meriva and the Astra Sports Tourer, are extremely popular on the market. The updated Corsa and Antara are a resounding success, and Insignia sales still continue to grow in its third year on the market. The new Zafira Tourer and the Astra GTC will be launched in fall. And with the Ampera, the first electric vehicle suitable for everyday use, we will establish a completely new segment in Europe. This is an excellent basis for continued growth.’
Rüsselsheim will also become the third plant to manufacture the successful Astra. Beginning at the end of August, it will be built on the same production line as Opel’s flagship Insignia.
Mr Visser commented: ‘Our sales numbers show a long-term, stable, upwards trend. And we are not only growing because of the improved economic environment, we are also continuously improving our market shares compared to our competitors. Only very few manufacturers have managed this in the past months. It shows that our new cars fully meet our customers’ demands and requirements.
‘The Astra’s popularity especially, just keeps growing, and with the new extra shifts we will be able to meet customer demand even better. With the introduction of the Astra GTC we add an especially sporty chapter to the success story of this model series.’
The brand is also continually developing its environmental proposition to fleet and retail buyers, both with the ever-expanding list of highly-efficient ecoFLEX vehicles on offer and also its extended-range EVs – the Ampera and mechanically-identical Volt.
In fact, rental giant Europcar has just announced a partnership with Opel/Vauxhall whereby it will roll out both cars from the end of this year, starting in Germany, followed by Belgium, the Netherlands, France, Italy, Portugal, Spain and the UK. The deal is said to be “significant” and will see Europcar and Opel work together to introduce the car to customers, who would then be invited to give feedback on the car through online chats and questionnaires.
The Vauxhall Ampera is also eliciting much interest from UK fleets, despite the fact that it doesn’t go on sale until next year, and is already seeing demand from major blue chip corporates as well as public sector fleets.
Finally, GM’s development programme for fuel-cell powered cars is also progressing, with such models seen as the best long-term solution for reducing dependency on oil.
GM Europe fleet set-up
GM’s involvement in the European fleet market is comprehensive. In terms of structure, there’s a dedicated fleet team operating out of Rüsselsheim plus European account managers; one based in UK, two in Germany and another in France. Typically those three markets are where 85% or more of customer offices are based. There is also a new account manager based out of Budapest who is the regional expert for Eastern Europe and there are dedicated back office teams based in the UK and in Rüsselsheim.
The brand’s European fleet team is headed up by Ian Hucker, who is director – European fleet, remarketing and used vehicle operations and is based in Rüsselsheim.
Hucker says that GM was in there from the beginning with the pan-European market – and pan-European agreements – and has been involved for more than 10 years.
‘Involvement is mainly with pharmaceuticals, utilities IT, electronics and components suppliers,’ he says. ‘Generally the organisations themselves have a strong Euro footprint, but also a strong central Euro function and able to execute any car policy at Euro level. Main models tend to be Astra (job car for engineer), Insignia (perk car) and Corsa. With a pan-European agreement the customer gets a good quotation across all countries where they operate.’
Hucker reports that last year many organisations were extending their agreements for another year but there has been a change in 2011, with vehicles that were extended now being replaced ‘There is generally growth in terms of customer base – but new agreements are being established,’ he added.
Latest figures show strong growth in Europe but are there any markets where Opel/Vauxhall is not strongly represented. And what are the plans for developing markets? ‘Opel/Vauxhall is still predominately a Euro brand under the umbrella of General Motors,’ says Hucker, ‘But we have in recent times expanded into other areas and have an operation to bring Opel into Australia. In China, Opel is now present. In South America we are there as General Motors with Opel-based product badged as Chevy.’
He says the import and distribution of cars is generally owned and controlled by Opel/Vauxhall in each country. ‘There are a few exceptions as you push really far east around Russia. We have very little presence there and the market is very small right now. In the core Western Central and Eastern European market we own our import operations 100%. These national sales companies that are Opel subsidiaries are owned a 100% by us – but this is not the case with all our competitors.
‘It really is a major advantage when we put our pan-European agreements together as we can, with confidence and with some accuracy, provide a customer with terms in every country in which they operate and stand by those terms, as opposed to having give estimates, guidelines or approximations based on the feedback of an importer.’
Relationships between Opel/Vauxhall and the major contract hire and leasing companies are very strong, he says. ‘They are crucial partners to us as an increasing number of vehicles are leased. While we have the interface with the customer it is also crucial to have the right interface with the leasing company. The sort of things that concern us – or that we are watchful of – is that we are constantly changing the ranges and bringing in new features, new engines with lower emissions, mid-cycle enhancements – and brand-new models. It is crucial for us that the leasing industry fully understands the product offer and accurately reflects the new offerings into their systems when it comes to them quoting to the end-customer for a monthly rental.
‘With concepts like the new Ampera, for example, we have spent a lot of time with the leasing industry both at a central level but also a local level to walk them through the new technology and help them to understand how this differs from the hybrid or pure battery electric so they understand why it stands out for fleets.’
The firm is also happy to carry out business through a third-party fleet management organisation. ‘Our primary focus is to respond to whatever the customer wants us to get involved with. So if a customer has engaged Fleet Logistics – as an example – we are more than happy to work with these guys and basically provide what the end-user needs to position the right product in the choice lists to have that vehicle available on their fleet. Typically, it is the customer who would engage the third-party management organisation and then we would basically have dialogue with and work with all parties.’
Through its work with pan-European fleet operators, Opel has a lot of experience of dealing with Requests for Proposal (RFPs) and Hucker has the following advice for organisations looking to generate the best responses.
‘The first point is almost like a contradiction. On the one hand, sometimes we see huge reams of detailed information being asked for at a very early stage of the RFQ and when we talk to our customer and ask, “At which stage of the decision-making process did that come into play?”, it didn’t.
‘On the one hand keep it simple but on the other hand some degree of detail is very good and important.
‘Secondly, is the completion time. We routinely get RFQs for 34 to 35 different European countries. That takes a bit of time to get the information out – and then to get the right responses back from the markets.
‘The third thing is quite often the manufacturer responses come in and then nothing happens because they [the customer] have some internal selling to do. As a consequence by the time they are ready to take it to the next stage too much has changef, which means effectively they have to re-tender.’
He also has the following comment on the success of pan-European agreements: ‘What we would say is that they only really work when the customer can genuinely influence the car policy in each of their individual markets and subsidiaries. When they can, a pan-European agreement can work very, very well but when they can’t it can generate frustration.’
In terms of the model line-up and its popularity in the corporate sector, Opel/Vauxhall’s strengths have traditionally been the fleet staples of Astra, Insignia and, in some areas, Corsa, particularly with the development of its ecoFLEX line-up. However, the brand is also set to see much fleet interest for its Ampera/Volt extended range EVs (E-REVs).
Already the brand has been running a series of Ampera workshops with customers, the leasing industry and the residual value experts to explain what the new concept is.
Hucker explains: ‘Primarily it is an electric vehicle which can drive for 40 to 80km on full charge with full electric power and zero tailpipe emissions. What makes it different is that range covers 80% of what people typically drive daily – but if you do have to go over that range there is a range-extender on board, which is a small efficient petrol engine used to generate electricity to support the drive where that gives flexibility until you reach a point where you can recharge the vehicle.
‘From the fleet perspective, that is single biggest fundamental difference from all the others. A customer can drive to the office daily using purely electric power all of the time but it can also be used for the odd business trip without having another car waiting in wings in order to do that.
‘It really is a car that works in a fleet environment.'