What is the benefit of Cadillac that sold Opel?

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inside the house General Motors (GM), which sold Germany’s Opel to France’s Peugeot Citroen Group (PSA) for $2.3 billion, announced that it will remain in Europe with its Cadillac and Chevrolet performance models. More precisely, with these 2 products, Europe has clearly stated that it wants to replace the premium, that is, the luxury class, and grow. When he heard that, he immediately said, ‘Why?’ question may arise. Because Cadillac’s European operations are different from Opel’s and its size may be less efficient. The cars for sale have a high profit margin and can support the reputation of both brands. It is also a long-term plan to advocate and support Cadillac and Chevrolet as global brands. Some analysts commented, “It is better to have some presence in Europe than nothing. It is not necessary to be in large numbers. It is important to be profitable”, while others think that keeping these 2 products will not benefit GM at all.

DIFFICULT TO WORK AGAINST THE GERMANS 3

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The American Cadillac brand has been making efforts for the past 10 years to compete against BMW, Mercedes and Audi in Europe. The 3 Germans today hold about 85 percent of the European luxury car market. They each sold between 820,000 and 840,000 vehicles in Europe in 2016. On the other hand, Cadillac, which has 45 dealers in Europe, mostly in Germany and Switzerland, had only 781 sales last year. In addition, these sales have increased by 33 percent compared to the previous year. Even when we add the Chevrolet Camaro and Corvette, many of which are sold in the same place as Cadillac, to these numbers, they can’t even surpass the niche car brands that cost millions of dollars. A senior auto industry analyst said, “I don’t see the benefit of putting Cadillac in Europe. It’s not a good situation for the brand that even niche manufacturers like Bentley and Ferrari are better than you. I can understand just putting popular American cars like Camaro and Corvette there Europe, but it should not be a Cadillac.

MUSTANG SUCCESS

At this point, we meet the Ford Mustang model. Ford, which designed the Mustang in European standards, received its reward in 2016. Last year, Mustang sales increased by 44 percent to 15,300 units. In other words, it’s clear that there is a place for American fashionistas with the right strategy in Europe. But the total sales of Corvette and Camaro, which is similar to Mustang, in Europe last year, was only 1800 units. GM aims to reach 5,000 sales in 2020 with its Cadillac and Chevrolet models. It should not be forgotten that this target includes a very small part of the market in Europe, where 15 million cars are sold. In fact, when we look at it, we see that Cadillac is on a growth plan in the global luxury car market. Europe seemed to be involved, but the biggest piece of the deal is now China and then the Middle East. Cadillac continues to grow today in China and many emerging markets, including the Middle East. According to the company, America and China stand as the volume centers for Cadillac, while disciplined growth is popular in Europe.

A GOOD ALTERNATIVE TO LUXURY BANDS

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CADILLAC spokesman Andrew Lipman said that they plan to increase their dealer network in Europe significantly in the next few years and commented, “In fact, we see our brand playing the role of a boutique in Europe, we are an alternative to traditional luxury brands”. Today in Europe, Cadillac sells the ATS, CTS, CT6, XT5, Escalade, and ATS-V and CTS-V high-performance models. GM’s plans in Europe with Chevrolet and Cadillac sports models are similar to what it has done with Cadillac for Russia, which focuses on the high-end market.

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THERE ARE NO 2 BANDS IN TURKEY

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TODAY, neither Cadillac nor Chevrolet brands are officially operating in Turkey. In fact, Chevrolet was present in the market of Turkey and Europe until 2015. Chevrolet, which is in the middle class and in Europe with the old Daewoo models that were manufactured in South Korea, decided to leave Europe and Turkey at the end of 2015. Today, the models Chevrolet’s only American-produced Camaro and Corvette are sold in Europe. It was on the agenda of Cadillac, based in Europe, to enter Turkey under GM Turkey for a while, but later it was abandoned.

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CAN PSA BE SUCCESSFUL?

General Motors (GM) had two options for German Opel. In Europe, where the competition is getting more and more expensive, he would open his mouth and invest in Opel or leave this job to someone else. 10 billion in the last 16 years of GM dollars Considering that it suffered a loss, he stopped investing and chose an easier way, which is to sell. All eyes are now on the Peugeot Citroen Group (PSA). In the beginning the questions asked loudly, “Can PSA achieve what GM has failed to do?” he is coming Many industry experts in Europe believe that PSA, as a regional force, will manage Opel successfully and turn it into a profit in a short period of time. It is widely believed that the nature of the purchase and financial size will not burden PSA Group, on the contrary, they will provide significant savings. It is said that PSA Group knows the market situation and the measures that should be taken in Europe better than GM and has a great support of investors behind it. Today, the Peugeot Family, the French government and the Chinese company Dongfeng are the main shareholders in PSA. According to the investment bank Evercore ISI, he believes that PSA can quickly make profits at Opel with a trick that GM cannot use. But the most important thing attracts the sales manager of a luxury brand in Europe; “Opel, which used to be in better shape than Volkswagen, is very sad. The problems started when they lost the complete independence they had before. Opel has reached this point because the American automakers have traditionally had a corporate culture that focuses on cost rather than brand.