DETROIT: General Motors plans to mostly withdraw its Chevrolet brand from Europe in a sharp reversal of its global strategy for its most iconic brand.
The move means GM will record net special charges of about $700 million to $1 billion, including about $300 million of non-cash charges, mostly in the fourth quarter.
GM spokesman Dave Roman said the decision will not affect the automaker’s plan to break even in Europe by mid-decade.
GM’s Chevrolet sales in Europe fell 18 percent through October to 121,621 units. The Opel and Vauxhall brands posted a 3 percent decrease to 702,481 vehicles.
The company has lost money in Europe every year of this century, including $499 million this year through September, compared a $1.2 billion loss during the same period in 2012.
The company will continue selling Chevrolets in Russia, which GM recently shifted into its European business unit. But the brand will largely disappear from dealerships in Western and Eastern Europe.
GM CEO Dan Akerson has acknowledged that the company’s Opel brand was competing directly with Chevrolet in Europe, where consumers are still trying to shake off a debt crisis that slammed the market for cars. By removing Chevrolet, the automaker clears the way for Opel to be more successful.
“Europe is a key region for GM that will benefit from a stronger Opel and Vauxhall and further emphasis on Cadillac,” Akerson said.