Toby Hagon July 31, 2012
Newcomer Opel wants to be known for its German engineering and quality rather than being labelled as premium.
Opel says it is not a premium brand – although its range of city, small and medium cars does have premium prices.
The European division of General Motors is reinforcing its German heritage and engineering as it looks to establish itself in markets such as Australia.
Opel cars go on sale on September 1 with three main models: the Corsa city car, Astra small car and Insignia mid-sized car.
"The research we've done to date would indicate German provenance is very important," says Opel Australia managing director Bill Mott. "If you ask Australians - and we have - if you were to buy an imported vehicle which country would aspire that it came from and the answer is Germany by far and that's precisely what we offer.
"General Motors at present doesn't have a brand that addresses somebody who wants to buy a German-engineered European car, we don't have that here today," he says. "Come September 1 we will."
Despite minimal brand recognition in Australia, General Motors' European brand aspires to tackle the continuing popularity of the Volkswagen brand, which has seen the Golf change from a niche small car to one of the biggest players in the booming segment.
"For me premium [brands] are the likes of BMW, Audi and Mercedes," says Mott. "Then there's mainstream German products and that's more VW and Opel.
"It's what you call premium. We're saying we want to be aspirational. You haven't heard us here today present ourselves as a premium brand . I think we stand up absolutely eye to eye with Volkswagen and I think our offer ... is a compelling one."
Opel says it wants people to see Opel as "first and foremost German". Other brand pillars it counts as important are its 150-year heritage (the brand started making sewing machines before building its first car more than 100 years ago), striking design and a reputation for innovation.
"We haven't and we won't shy away from the fact that Volkswagen is our target competitor brand," says Opel Australia's product manager Min-Sean Chew. "They currently occupy the affordable German space on their own and we at Opel intend to shake this up."
But Mott acknowledges that the prospect of buying a European brand can turn some buyers away, particularly when it comes to running costs.
Unlike many that call for more expensive premium fuels, Opel says all its petrol-powered cars will run on regular unleaded fuel, albeit with a slight reduction in performance.
And the brand is introducing fixed priced servicing "to be completely transparent" about running costs.
"We remove any and all customer angst about buying a German vehicle," says Mott.
That said it's the European brands Opel lists as its main competitors: Renault, Peugeot, Citroen. But Mazda, Subaru and Honda are also in the mix. The brand dismissed Ford as a rival, despite the fact that the two compete in Europe. Ford's Fiesta, Focus and Mondeo are all designed and engineered in Europe, although the Fiesta and Focus are now built in Thailand and the Mondeo in Belgium.
And there's another brand Opel refuses to list as potentially crossing over – Holden.
Holden and Opel share a head office in Port Melbourne and there's obvious crossover between some of their models.
The locally-made Cruze small car, for example, replaced the Astra that will be born again wearing an Opel badge. The new Astra shares an engine with the Cruze, as well as major underbody components. And the pricing is within $1000 for the cars with that same engine.
"Holden we don't see as a direct competitor to our product," says Mott, outlining higher equipment levels, quality and that German engineering as points of difference to the Holden products.
But Opel is happy to use the Holden-Opel heritage where it can bolster sales.
Mott sees those who previously opted for the European-sourced Holden vehicles as potential targets who have migrated to other brands, including Volkswagen and Mazda.
"The big advantage we do have is the awareness of Astra and the pedigree it has. We'll absolutely leverage that – we'd be stupid not to."
Other challenges facing Opel include the loss-making position of the parent company, something that has dragged down the bottom line of General Motors.
Despite trying to offload Opel in the depths of the financial crisis - when GM also killed off Pontiac and Hummer and sold Saab - Mott doesn't believe speculation about the brand's future will hinder the establishment of the brand locally.
"I don't think that that's a major issue on customers' minds," he says, before saying "Opel is too fundamental to General Motors" in its plans to succeed globally to consider killing it off or selling it.
But establishing new brands in Australia is notoriously difficult.
Czech brand Skoda had big aspirations when it reappeared in Australia in 2007, failing to meet initial sales targets and only recently starting to get traction.
Others haven't even enjoyed that success, with Spanish brand Seat dying out in the late 1990s.
French marque Renault also struggled in the 1990s, forcing a recent relaunch designed to cement the brand as an alternative to the Japanese brands Australians love.
Opel has the advantage of Australians being familiar with the car likely to be its biggest seller – the Astra.
Sold here for decades as a Holden, the Astra was a rebadged version of the car developed by the German-based European brand.
The Astra nameplate still resonates with Australians, only recently topping a respected brand recognition survey.