GM brings Opel on the road to profitability – with a Russian shell game

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For the past three years, Russia was a part of China, at least in the world of GM. In January, GM’s Russian operations will be put “back under the control of its European wing,” as Reuters reports. “This will allow GM Europe to emerge more quickly from the red,” said Ferdinand Dudenhoeffer, head of the CAR automotive research institute at the University of Duisburg-Essen. At least as far as the books go.

“Profits that so far were booked in Asia-Pacific are now ending up in Europe. They are creating the appearance of progress with the restructuring of Opel,” Dudenhoeffer said.

Russia came under the purview of General Motors International Operations (GMIO), based in Shanghai. Beginning next year, Russia will be part of GM Europe (GME). Opel’s sales in Russia, along with those of Chevrolet and Cadillac will all be reported as those of GM Europe. Come February 2014, expect huge sales gains to be announced by GM’s European business unit, and keep in mind where they came from. With 165,000 units delivered last year, VW outsells Opel in Russia two to one. GM’s Chevrolet sold over 205,000 cars, Cadillac managed around 2,000.

Russia is Opel’s only major growth region, however, it has seen better days. The Russian car market was down 5 percent in September, and saw a seven percent reduction in the first nine months of the year. Joerg Schreiber, chairman of the Association of European Businesses (AEB) , said that despite cautious signs of improvement, the Russian ” patient as a whole is still far from being well.”