General Motors Co. plans to largely withdraw its Chevrolet brand from Europe at the beginning of 2016, focusing more sharply on its main Opel and Vauxhall brands.
Chevrolet will no longer have a “mainstream presence” in Europe, GM said in a statement Thursday, adding the decision was “largely due to a challenging business model and the difficult economic situation” on the continent.
The company said the move will reduce the “market complexity” of maintaining several brands in the region.
GM has continued to lose money in Europe, where automakers’ sales have been hampered by persistent economic weakness, even as the company’s performance elsewhere improves.
Chevrolet will still offer “select iconic vehicles” such as the Corvette in Europe, and will retain a broad presence in Russia, GM said.
It expects the decision will result in net charges of between $700 million and $1 billion, primarily in the current quarter and continuing through the first half of next year. Those charges include asset impairments, dealer restructuring, sales incentives and severance-related costs.
In 2012, Chevrolet sold 195,000 cars and SUVs in western and central Europe. In the first 10 months of 2013, it sold 137,000 vehicles in the region.
CEO Dan Akerson said GM’s European operation will benefit from a stronger Opel and Vauxhall and from plans to expand the Cadillac brand’s presence. He stressed that “Europe is a key region for GM.”
For Chevrolet, the decision “will allow us to focus our investments where the opportunity for growth is greatest,” he said.
Most of the Chevrolet models sold in Europe are produced in South Korea. GM said it will focus on profitability, cost management and maximizing sales in its Korean operations.