Opel Details Turnaround Plan

Adam Opel AG aims to cut its sales breakeven point 30%, roll out four electrified models and achieve a positive operating margin—all by 2020.

The company detailed the goals today as CEO Michael Lohscheller unveiled Opel’s first business plan under the ownership of PSA Group. PSA finalized its $2.5 billion (€2.2 billion) acquisition of the chronically money-losing business from General Motors Co. in August.

Opel calls the plan PACE (short for profitability/performance, agility/accountability, collaboration/customer focus and enablement/empowerment).

Opel and its Vauxhall British brand target a sales breakeven point of 800,000 vehicles, down from last year’s 1.16 million units. Opel also hopes to double export sales by 2020 and by 2025 derive more than 10% of overall sales from markets outside Europe.

The company expects 40% of its sales by 2021 will be SUV/crossover vehicles. It also aims to increase deliveries of light commercial vehicles more than 25% by then.

Opel confirms that it intends to offer plug-in hybrid and/or all-electric powertrain options for all European passenger car models by 2024. Lohscheller reiterates that Opel expects to achieve an operating margin of 2% by 2020 and 6% by 2026.

Opel will add nine models by the end of the decade, all of them engineered at the brand’s technical center in Russelsheim. But Opel’s factories will drop the nine platforms that carry its cars today. By 2026, all Opel/Vauxhall models will ride on one of two PSA platforms (CMP and EMP2).

Opel’s powertrain families will shrink from the 10 it uses now to four PSA lines. Lohscheller says the moves will help lower Opel costs by €700 ($814) per car by 2020.