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Chevy, Europe To Part Ways as GM Tires of Lagging Sales There

By Michael Mullins   |  

Chevy sales in Europe will be largely halted by the end of 2015, General Motors announced.

The announcement by the automotive company comes as a result of its failure to build significant market share in Europe with Chevy, opting instead to replace it with its Opel and Vauxhall lines as the company attempts to return to profitability, Reuters reported.

"The decision to focus on growing Chevrolet's presence in Europe was made years ago when Opel's future was in question," GM Vice Chairman Steve Girsky told The Wall Street Journal. "It has become clear that Chevrolet's results have become unacceptable, and we have to make a resource-allocation decision here. Opel is gaining momentum, and the Chevrolet resources will be redeployed to help that and grow the brand elsewhere."

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Having lost $487 million last year, GM’s most recent earnings report in the third quarter of 2013 saw a decreased loss of $214 million thus far this year.

Forbes reported that while just 138,000 Chevy vehicles were sold in Europe in the 2013 third quarter, 249,000 Opel/Vauxhall vehicles were sold during that same period.

The about face will lead to a savings in production, marketing and distribution in the long run, according to GM which made the announcement on Thursday. The decision however drop the Chevy brand in Europe will come with an initial cost of approximately $1 billion the Detroit, Mich.-based automaker estimated.

"Europe is a key region for GM that will benefit from a stronger Opel and Vauxhall and further emphasis on Cadillac," GM Chairman and CEO Dan Akerson said in a statement Thursday morning. "For Chevrolet, it will allow us to focus our investments where the opportunity for growth is greatest."

To quell whatever concerns those who own Chevys in Europe may have, Thomas Sedran, president and managing director of Chevrolet Europe, said in a statement, "Our customers can rest assured that we will continue to provide warranty, parts and services for their Chevrolet vehicles, and for vehicles purchased between now and the end of 2015."

Following the announcement, GM shares rose 1.1 percent on the New York Stock Exchange in afternoon trading Thursday, Reuters noted.

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Chevrolets were positioned to compete against the likes of Volkswagen's Skoda, South Korea's Hyundai, and Renault's Dacia among other cars in the so-called budget end of Europe's car market. Having been reintroduced to the European market in 2005, the Chevy failed to make much headway against the above mentioned cars.

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