GO
Loading...

GM does a U-turn on Chevy in Europe

The Opel factory in Rüesselsheim, Germany.
Getty Images
The Opel factory in Rüesselsheim, Germany.

After several years and hundreds of millions of dollars spent trying to make Chevrolet a popular mass-market brand in Europe, General Motors is making a U-turn.

The company said Thursday that it is withdrawing Chevy as its No. 1 brand for mass-market vehicles in Europe and will make Opel its primary mainstream line.

It's the kind of move that makes sense when you look at the numbers. At the same time, it raises more questions about GM's long slog in Europe—where it has lost money for the past 14 years.

(Read more: GM hits another high after re-entering markets)

General Motors plans to stop selling most Chevy cars and crossovers in Europe by the end of 2015, the company said. It will still sell Chevy's iconic models, such as the Corvette, but mainstream cars such as the Cruze will no longer be offered under the Chevy badge.

Instead, the company will focus marketing and sales plans on its long-standing European brands, Opel and Vauxhall. Opel outsells Chevy five to one in Europe, according to sales figures.

Wall Street reaction was split when former GM CEO Rick Wagoner announced in 2005 that Chevrolet would become the automaker's primary brand globally.

(Read more: Mustang rides again with new model)

There was applause for the decision on one side. Some thought that pushing it as the mainstream flagship would allow GM to leverage its marketing power.

On the flip side, many wondered, "What happens to Opel?" Europe has long been a fractured market—with more brands than you'll find in the U.S. competing on a continent with lower sales. But Opel has built up a strong following over decades, so Wagoner's choice to ditch it for Chevy would not have been easy.

(Read more: Auto rates drop, loans hit record)

For GM, clearing up the mass-market battle between Chevy and Opel will be a relief, as the two were battling each other in a crowded and competitive market.

With this new decision, it would appear GM is finally admitting that its plan to push Chevy in Europe has failed.

—By CNBC's Phil LeBeau. Follow him on Twitter @LeBeauCarNews.

Questions? Comments? BehindTheWheel@cnbc.com.

Symbol
Price
 
Change
%Change
GM
---

Featured

Autos