The sale of Opel Automobile GmbH with its brands Opel and Vauxhall by General Motors to Groupe PSA was finalized at the beginning of August. The Opel/Vauxhall management team set to work on a plan for the future, now announced as its PACE! strategic plan.
Under PACE!, all of the company’s European passenger carlines will be electrified—offering a pure battery electric propulsion or plug-in hybrid version alongside efficient internal combustion engines—by 2024. By 2020, Opel/Vauxhall will have four electrified carlines on the market, including the Grandland X PHEV and the next-generation Corsa as a fully electric vehicle.
At the Frankfurt show in September, Opel CEO Michael Lohscheller unveiled the compact SUV Grandland X, and said that the vehicle will also be the first Opel to be offered as a plug-in hybrid. (The Grandland X will also be available with a diesel and 8-speed automatic.)
All PACE! initiatives are to contribute to the goals of generating a positive operational free cash flow as well as a recurring operating margin for the auto division of 2% in a first phase by 2020 and of 6% by 2026.
Combining strengths will unleash annual synergies on Groupe PSA level of €1.1 billion (US$1.3 billion) by 2020 and €1.7 billion (US$2 billion) by 2026. All actions will contribute to a lower financial break-even point for Opel/Vauxhall of 800,000 vehicles, creating a profitable business model whatever the headwinds may be.
Under PACE!, the company intends to enhance its competitiveness by 2020 by reducing costs by €700 (US$814) per car. Efficiency of marketing expenses will be improved by more than 10%. Overall efficiencies will be increased by reducing complexity across all functions with a ratio G&A/revenue moving from 5.6% to 4.7% and an objective to bring the company towards industry benchmark in terms of wage cost/revenue ratio.
Optimizing R&D and CapEx at 7-8% of automotive revenue, manufacturing and administration processes by 2020 and releasing working capital of €1.2 billion (US$1.4 billion) by 2022 will also contribute to seizing synergies.
Improved competitiveness of the manufacturing plants will lead to new vehicle allocations that will provide a better utilization rate for the next decade. The two Groupe PSA platforms CMP and EMP2 will be localized in all Opel/Vauxhall plants. To start with, an EMP2-based SUV is planned for Eisenach in 2019; and an EMP2-based D-segment vehicle is coming to Rüsselsheim. The allocation of new powertrains in Opel/Vauxhall manufacturing sites will accompany the shift from GM to Groupe PSA engines and transmissions.
All new Opel/Vauxhall vehicles will be engineered in Rüsselsheim, which will be transformed into a global competence center for the whole Groupe PSA. Areas of expertise include fuel cells, certain automated driving technologies and driver assistance developments.
Altogether, the number of platforms Opel/Vauxhall uses for its passenger cars will be reduced from currently 9 to 2 by 2024. Furthermore, the powertrain families will be downselected from 10 currently to 4.
Opel/Vauxhall will switch to efficient and flexible Groupe PSA vehicle architectures faster than originally expected. From 2024 onwards, all Opel/Vauxhall passenger car models will be based on joint Groupe PSA architectures. Next to come are the Combo in 2018 and the next generation of the bestselling Corsa in 2019. This course will be steadily continued with one major launch per year.
Counting every body style, Opel/Vauxhall will launch 9 new models by 2020. This line-up will enable to increase the pricing power of Opel/Vauxhall brands and reduce the gap against benchmark by four points.
Furthermore, Opel will enter more than 20 new export markets by 2022. Beyond that, Opel will explore global midterm overseas profitable export opportunities.
To foster growth in the financially attractive light commercial vehicle (LCV) business, Opel/Vauxhall will launch new models and enter new markets with the clear goal to increase its LCV sales by 25% by 2020 against 2017.