FRANKFURT General Motors' (GM.N) struggling European unit Opel has emerged from its worst-ever sales crisis in Germany and now expects to gradually expand its slice of the market back into the double digits, a level not seen since 2005.
"Upcoming models will allow us to occupy segments where Opel so far has not been present. We will then have the necessary products in the showrooms to crack the 10 percent market share ceiling in the mid to long-term," Germany sales chief Imelda Labbe told Reuters in an interview.
Nowhere did Opel sell more cars in 2011 than in its domestic market, Europe's largest. Yet its share has steadily eroded in recent years to record lows - a key factor that has contributed to Opel's incessant flow of red ink.
Despite winning two of the last four prestigious European Car of the Year awards with the Insignia and Ampera, the brand has been unable to shed its working class image in Germany and move upmarket where debilitating incentive wars are less common.
Chronic speculation over a possible sale or even controlled bankruptcy partly stoked by GM itself has not helped.
Opel, which now needs to drastically lower its breakeven point by once again cutting thousands of jobs, plans to present a long-term business plan on June 28 that will likely entail the closure of its Bochum manufacturing plant in Germany.
Higher sales are an absolute must for Opel, but official data for May showed new car registrations falling twice as fast as the overall German car market compared to the previous year.
Given figures were even worse earlier this year, Labbe believes the downward trend has stopped: "May was a good month for us. Official data shows our market share rose (over April) to 7.9 percent and currently we expect this to improve further."
The new Zafira Tourer MPV, built exclusively in the endangered Bochum plant, has played a crucial role. Opel nearly doubled its share of the domestic van market to 20 percent in the first four months of this year thanks to the model.
Labbe played down speculation that Opel was artificially inflating sales, a claim recently made by Ferdinand Dudenhoeffer at the CAR-Centre Automotive Research in Duisburg.
According to CAR, Opel had the highest number of tactical registrations of Germany's 10 largest car brands. These are new cars registered under the name of the automaker itself or its dealers, sometimes to "sugarcoat" sales volumes. Many are sold shortly thereafter as used cars at hefty discounts.
Adjusted for this effect, he estimated Opel's market share at just 5.8 percent in the first four months of this year.
"Over a third of all new cars in Germany are registered either by rental companies, dealers or the manufacturers themselves," Labbe said, when asked if tactical registrations indeed comprised 42 percent of Opel's domestic sales.
"It's a sales tool for every manufacturer. Overall we do not intend to engage ourselves any more heavily than our competitors and we are not buying market share," she added.
Labbe sees growth potential in serving more of Germany's small and medium-sized corporate customers, dominated by rival Volkswagen (VOWG_p.DE), but warns that making major inroads could require as much as two years.
"We are supporting our dealers' efforts to add salespeople dedicated to building up key account relationships with corporate customers. But it will take time before we will see the first result," she said.
Helping her will be a steady stream of model launches in the next months. Come September, Opel will expand its Astra line-up to include a new saloon version of its popular compact family in addition to the hatch and estate derivatives.
"Notchbacks haven't played an important role in Germany in the past, but we're convinced the Astra sedan will give this market segment a real push," she said.
Opel will also begin selling in October its Mokka, the first subcompact SUV by a German brand. Early next year the new Adam lifestyle minicar hits dealerships and later on Opel will unveil an all new convertible that will positioned above the Astra.
(Reporting by Christiaan Hetzner; Editing by Jon Loades-Carter)