GM's European divisions may turn to Chevrolet for some much needed help.
General Motors could turn to its Chevrolet brand to help revive its struggling Opel/Vauxhall European units. Opel/Vauxhall's CEO revealed on Monday that the company is currently considering a plan to build Chevrolet models at some of its underutilized European plants.
Despite recent expansions in China and Russia, most of Opel/Vauxhall's plants continue to run well under full capacity, causing the European division to hemorrhage money. However, Opel/Vauxhall CEO Karl-Friedrich Stracke revealed in a new growth strategy that some Chevrolet models could be built at the division's underutilized plants in a bid to shore up the automaker's financial situation.
"We're in discussions with management in Detroit and Shanghai to study whether or not there is merit in building Chevrolet vehicles in Europe to improve capacity usage," Stracke said.
He added: "It is not a cost-cutting plan at all. It is much rather a comprehensive plan to quickly improve profitability, irrespective of if and how much the market is going to pick up steam. The plan will allow us to significantly increase our margins, market share and sales."
The plan is expected to be reviewed at Opel's Supervisory Board Meeting in June.
Although specific details of the plan remain closely guarded - including which Chevrolet models are being considered for production in mainland Europe - Stracke indicated that Opel's home plant in Rüsselsheim is the main focus of the plan.
Opel lost $256 million during the first quarter of 2012.