BERLIN, Sept. 21 (Xinhua) -- Opel will reduce its current volume of automotive production in order to improve long-run profitability, a spokesperson for the German carmaker told Xinhua on Friday.
While the spokesperson was unable to provide concrete numbers, it confirmed earlier reports by the "VRM" newspaper group that the Ruesselsheim-based company is set to downsize its assembly line operations as a consequence of weak demand.
Opel reiterated in an official statement that the carmaker "regularly adapts production plans" in its plants but could not "reveal details of these internal plans."
In a background conversation with Xinhua, however, the spokesperson elaborated that upcoming changes to production reflected a new sales policy adopted in the wake of the company's acquisition by the French PSA group.
Whereas Opel had targeted a high volume of vehicle production in the past, only to have to offer discounts on bulk sales which weighed on margins, the focus in Ruesselsheim was now on making cars that could also be sold at a healthy profit. The reduced scale of vehicle assembly hereby also reflected falling sales in Opel's European home market.
The spokesperson emphasized that all carmakers updated production figures on a running basis to ensure the most efficient possible operations at their respective plants and complained that Opel was receiving a disproportionate amount of public attention in this regard. Following its takeover in 2017, media reports repeatedly speculated that an original promise by the new owners not to close any Opel plants in Germany could be broken due to a desire by PSA chief executive officer (CEO) Carlos Tavares to improve its profitability.
In spite of reaching an earlier agreement between PSA and Opel not to close any factories in Germany and refrain from further involuntary lay-offs of staff until 2023, the Opel workers' council has recently urged the management board of the company to clarify reports that it plans to sell parts of the Ruesselsheim-based development center. "A sell-off of the Opel development branch would rob Opel of its future", the workers' council warned.
Back in May this year, Opel CEO Michael Lohscheller vowed to "keep all Opel plants in Germany and Europe and make all plants competitive."
Opel was first founded in 1862 and employed 37,000 workers (19,000 thereof in Germany) as of 2017.
