Adam Opel denies cuts Vectra sales target

FRANKFURT June 23 Reuters reported that Adam Opel AG, the German unit of General Motors , denied a report on Sunday that it had cut sales targets for its new Vectra car but confirmed that output of the mid-sized flagship model was below plan.

German magazine Automobilwoche cited Uhland Burkart, board member responsible for sales and marketing as saying Opel expected to sell 100,000-120,000 Vectra units in Europe in 2002, down from an earlier target of 150,000 after a slowdown in daily output to 650 vehicles a day from a planned peak of 870 units.

"At the moment there is no revision of sales plans," Opel spokesman Karl Mauer said, but added that the group was still not up to planned production volumes for the Vectra, the focus of a restructuring plan aimed at restoring Opel to profit by the end of 2003.

"We are still in the launch phase and we can't always produce what we want to produce," he said.

Automobilwoche said the production slowdown, caused by a tighter focus on quality control, meant the group was struggling to fill 40,000 outstanding orders from across Europe.

"We are currently not in a position to work through the order backlog," the magazine quoted Burkart as saying in an extract from an article issued ahead of publication.

Automobilwoche said Burkart's forecast of lower Vectra sales appeared to confirm speculation the group would make a 2002 operating loss of up to 500 million euros ($482.6 million).

In January the unit posted a record operating loss of 674 million euros for 2001, against a loss of 502 million a year earlier.

Opel is in the middle of an overhaul including a 15 percent capacity reduction, job cuts and the introduction of a raft of new models, notably the Vectra.

The group has been struggling to reverse a perception among consumers that Opel cars are inferior to models from rivals like Volkswagen AG (XETRA:VOWGN.DE - News) or Peugeot (Paris:PEUP.PA - News) following quality problems in the 1990s.

The weekly Welt am Sonntag quoted Chief Executive Carl-Peter Forster as saying that although Opel had overcome the problems over the past two years, it would take five to six years before it won back consumer confidence completely.