General Motors sale of Opel/Vauxhall could be the start of additional company paring, according to an Automotive News report. As the company shifts its focus from volume to profit, the company’s CEO says additional pruning may be required globally.
“There’s a little bit more work that we’re doing in the international markets,” GM CEO Mary Barra told Automotive News. “Our overall philosophy is that every country, every market segment has to earn its cost of capital.”
The Opel/Vauxhall transaction isn’t the first time in recent years GM has been willing to offload unprofitable business units. The company has pulled out of the Russian market, gave up on offering Chevrolet products in Europe and has shuttered Holden’s local manufacturing in Australia.
No one expects to see another shift to the scale of the Opel/Vauxhall sale, but additional cuts appear to be likely if Barra’s comment is to be taken literally. In fact, the company is already in the process of selling one of it’s plants in India to Chinese joint-venture partner SAIC, a further retraction in a global market.
There’s additional speculation that there are no sacred cows in North America either. It is rumored that some of the automaker’s call lines in North America are potentially on the chopping block, including the Chevrolet Sonic and Impala. As consumers buying preferences shift from passenger cars to crossovers and SUVs, cuts to the company’s sedan lineup seem like an obvious next step.
Sales of both the Impala and Sonic are off in double digits for 2017, while sales of the new Buick LaCrosse are also stalling out. The LaCrosse too, could be a potential cut for the company.
Aside from the above, it isn’t known what Barra has in mind when it comes to further “pruning.” Time will undoubtedly tell as today’s GM appears to be laser focused on disciplined use of capital. The pruning is expected to free up capital for investments in new technologies, such as autonomous driving and mobility services.