Passionate motor guy, and a motor industry professional

I need to come to Ireland and look at Opel’s situation before I can make any comment on how the operation should continue to be run, or not

 

Stephen Norman is not a man to be drawn on speculation. Appointed as the new managing director of both Vauxhall Motors in the UK, and Opel’s Irish operations, he faces the difficult tasks of reviving the flagging fortunes of the interlinked brands, both of which have seen sales fall in 2017.

Under the new ownership of PSA Peugeot Citroen, Opel must now try to re-establish itself as a key player in the market, but certainly in Ireland it has fallen a long way. From the top-selling brand in the late 1980s and early 1990s, Opel now languishes in ninth place in the Irish sales chart, its sales having contracted by 17 per cent in 2017 alone, and it’s only just ahead of Audi in sales terms.

Given all that, it seems slightly odd to be bundling Opel in with Vauxhall in the UK, at a time when there is so much uncertainty over what effect Brexit will have on trade between the EU, Ireland, and Britain. How will the demands of sales, after-sales, HR, and so many other areas be dealt if Brexit puts up a brick wall between the two markets?

Mr Norman refuses to be drawn. Drawn, that is, on any point but one; that Opel Ireland is still an independent entity, and not now a mere offshoot of Vauxhall’s UK operations.

“I think it means that Opel Ireland is not, effectively a subsidiary of Vauxhall Motors, but a subsidiary of the Opel-Vauxhall group in Europe, acting just as any other major country” he said.

“I think there are some assumptions which are far from certain. First of all, I need to start my job on February 1st, and I need to come to Ireland and look at Opel’s situation before I can make any comment on how the operation should continue to be run, or not.

“Obviously, there are a number of hypotheses concerning Brexit today, but there’s not enough clarity as to what is going to happen. It will clearly have a major effect on the Vauxhall business, and we’ll have to see what effect it will have on the Opel business in Ireland. But I would not want anyone in Ireland to believe that we’re going to run something from England. These are two markets, and the Irish market is an extremely idiosyncratic market, both in terms of calendar and composition, and these need to be taken into account very seriously. I certainly wouldn’t want you to go off with the glib idea that this is going to be run from the UK in an off-hand manner.”

Given that Mr Norman was barely 24 hours into his new role at the time of speaking, it’s perhaps rather unsurprising that he’s reluctant to comment specifically on such matters. Reluctant too, to discuss the Limerick-based operations of Opel’s OnStar concierge service. Are the jobs there safe? Will they be added to? Brexit issues, again? “On Limerick, I can’t make any comment on that situation today” was the simple, if unilluminating, answer.

There’s a little more solidity when it comes to the possibility of Opel’s Irish arm being combined with the local operations of both Peugeot and Citroen (currently held, respectively, by Gowan Distributors and IM Group). “I would think it would be the last thing that we would do, to combine the Irish operations of Opel, Peugeot, and Citroen.”

Despite his comments, many industry watchers here have speculated that the relatively tiny size of the Irish market, and the relatively small market shares of those three brands may someday make it an imperative.

On the fact of Ireland’s uniqueness as a market, Mr Norman’s comments will at least be pleasing to those wary of big corporations failing to understand the quirks and specifics of the Irish motor trade. “I think it’s a question that is common to all motor manufacturers in all markets. I’ve worked for five different manufacturers now, and they all of them approach market differentiation in a unique way. But I have never, ever worked for a manufacturer, including for example Fiat, or VW Group, where one size fits all. Ever. So I cannot possibly imagine, in joining the Opel-Vauxhall part of PSA Group, that there will be a one-size-fits-all policy. I have to start the job, come to Ireland, and meet with the people who know it best, including the dealers.

“No two markets are alike. I can think of many examples in the past where companies have put Portugal together with Spain, or The Netherlands together with Belgium, for example, and while that can be done to an extent in a back-office sense, but there are no two markets the same,” he said.

He’s cautious, cognizant of the fact that the footspace under his desk is barely warm yet. “I can only talk about what I know. Obviously as a passionate motor guy, and a motor industry professional, I do think that both Vauxhall and Opel’s strengths are not reflected in their sales. I do need to sit down and look at what’s happened over the past five to 10 years, look at the model mix, look at the number of cars sold per dealer, look at what we used to call sourcing patterns; who’s giving sales to whom. None of this is especially difficult, but it has to be done and done well, and I’ve seen so many people take these appointments and make swingeing statements, which they then could not deliver upon because they were misguided.”

He’s more vociferous when it comes to the Opel brand itself, and dropping some hints that both the model range, and pricing structure, will have to change.

“What history has shown is a very important parameter for the future. I do think it’s important to look back to those times, and ask when that was happening what was going on? I can, for example, remember when Opel was the leading imported brand in France, and the glory days of the Ascona rally cars, and Walter Rohrl and so on. I do think there’s been a shift in the positioning of the brand, there’s been a shift in customer perception. Now, I don’t think I will be penning too many theses to Harvard Business Review about why that has happened, but what will be interesting to see is with the new ranges of product, especially the Crossland and Grandland, how can we make that perception different again? And if we can get that right, it will have an immediate business value.

“And then of course, it will be the next generation of product, including the new small car. The customers will only come if the product and value proposition is right. I will certainly need to look closely at what the value proposition is, particularly the price being charged for what is very high-quality German craftsmanship. And then we can see what the real potential in the market is, and there is no reason in the world why an Opel should be undersold. Is it being undersold today? And to what extent? I suspect that it is, but I need to look more closely to be certain. Brand perception means the market positioning.”

He’s also keen to move the brands away from a reliance on fleet and business-to-business sales, and make greater inroads into selling to “retail” customers, or you and I to be more precise. “There is possibly potential in terms of business to customer, I’m not saying that business to business is a bad thing, but I do believe that there’s room to manoeuvre in the model mix, and to bring a little more balance to the relationship between business or fleet sales, and retail sales to private buyers,” he said.

Opel, certainly in Ireland, has a legacy of issues to overcome. The perception of the brand has plummeted in recent years, and it has been battered by increased direct competition from the likes of Toyota, Volkswagen, Nissan, and Hyundai and inroads from premium-badged marques. Then there has been the schizophrenia of recent years, as the company seemed to vacillate between wanting to be affordable for mass sales, but also craving the upmarket sales and profits of its home-grown German rivals.

Again, Mr Norman won’t be drawn. He refuses to criticise those past decisions, saying: “I think that the decisions that were made were the right decisions at the time. I really don’t have a bad feeling about the past at all. And the industry’s full of wisecrackers, going ‘well it shouldn’t have happened like that’. But it happened like that for a purpose, and obviously I’m going to have to be very careful about making judgments of what’s gone on in the past. What’s important is what’s going to go on in the future.”

Brexit, brand perception, a model range in the process of switching from GM parts to PSA parts, customer apathy, a nervous Irish marketplace, and a lukewarm critical reception for key models such as the Grandland X and Crossland X SUVs. Mr Norman’s plate is going to be full of Irish issues come February 1st.