Opel brand exits Australia

The network of 20 dealers and 15 Melbourne-based head office staff were informed of the decision today. Job losses are unlikely at dealer level because most dealerships are multi franchise and represent a number of other car brands.

However it is unclear how many -- if any -- Opel staff will be absorbed at sister brand Holden. Opel returned to Australia in September last year with three passenger-car models. An SUV was due to join the line-up next month.

But sales did not meet expectations and the company struggled to make a profit in what is regarded as the world's most competitive new-car market. "We can't sell our cars at the price they need to be in order to meet our volume targets," said Opel spokeswoman Michelle Lang.

"The Astra small car was supposed to underpin our brand but with the prices of most rivals dipping to close to $20,000 we just couldn't compete." Before Opel arrived in Australia under its own brand (the cars were previously sold with Holden badges in the 1990s and early 2000s) German management boldly and naively forecast sales of 15,000 cars within the first three years.

Instead, Opel did not even get a fraction of that, selling 541 cars last year and 989 in the first six months of this year. The hasty exit means that the remaining Opel cars in dealer stock will be sold at clearance prices.

The warranty, parts and service of the existing fleet of Opel cars is yet to be determined but it will likely be done via the dealerships of General Motors partner Holden. The arrival of Opel was doomed from the beginning. General Motors tried to pitch a relatively unknown badge with a price premium in a market with 67 brands. Now there are 66.

This reporter is on Twitter: @JoshuaDowling