Opel Vauxhall to woo budget clients with low-end cars: source

FRANKFURT Mon Jul 21, 2014 3:07pm EDT

A general view shows the roof of the Adam Opel AG car production plant in Eisenach April 23, 2014.   REUTERS/Fabrizio Bensch

A general view shows the roof of the Adam Opel AG car production plant in Eisenach April 23, 2014.

Credit: Reuters/Fabrizio Bensch

FRANKFURT (Reuters) - Opel plans to build a range of entry-level cars to recapture the type of budget customer who in the past bought its Chevrolet brand, a person familiar with the matter said on Monday.

Value brands including Dacia and Skoda have enjoyed robust growth in austerity-plagued Europe, but the European arm of General Motors (GM.N) has largely missed out after it decided to mothball the Chevrolet in Europe last year.

The company has been deliberating whether to enter the value segment in Europe for some time, and management is now looking for ways to expand the Opel range following a multi-year restructuring, the source said.

The move comes as part of a broader European revamp to turn over organizational responsibility for GM's brands in Europe to Opel Group GmbH, a newly created organizational entity with around 100 employees, which Opel announced on Monday.

Opel Group will be in charge of Chevrolet's operations in Russia and the Cadillac brand in Europe, an Opel spokesman said.

Last month, Opel Chief Executive Karl-Thomas Neumann said the Germany-based auto maker was considering making a car designed to lure clients away from other value brands.

The Financial Times on Monday reported that General Motors would launch a line of low-cost models.

In October last year, General Motors put its Russian operations back under the control of its European arm. Two months later GM dropped the Chevrolet brand in Europe to focus on its Opel and Vauxhall brands.

GM has made a turnaround of its European business a top priority after racking up some $18 billion in losses over the past 12 years.

(Reporting by Edward Taylor; editing by Jane Baird)

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