GM raises car sales forecast for Opel/Vauxhall

FRANKFURT -- General Motors Co.'s European unit expects to sell 10,000 to 15,000 more cars in Europe than originally forecast this year, GM Europe President Nick Reilly said in an interview with Dow Jones.

Reilly said strong demand in markets such as Germany and Russia will more than compensate for weaker sales in countries such as Spain and Portugal.

Opel/Vauxhall is GM's second best-selling brand after Chevrolet but is the U.S. automaker's only unprofitable division, having made a $1.76 billion loss last year.

Better sales will help GM Europe to reach its goal of breaking even this year before restructuring costs and making a profit next year. The division is reducing production capacity by a fifth and cutting around 8,000 of its 48,000 workforce.

Reilly said measures to reduce the workforce by 1,200 at Opel's plant in Bochum, Germany, remain the biggest challenge. Too few workers have accepted voluntary buyouts or the offer to work in another Opel factory, forcing the carmaker to seek arbitration to settle the problem.

To boost sales outside Europe, Opel plans to export to Australia, China, Argentina and the Middle East after expanding in Israel, South Africa and Chile. The automaker is targeting exports of 40,000 to 50,000 vehicles this year, with the goal of raising this to around 100,000 units in three or four years, Reilly said in at the Geneva auto show last month.

Reilly said Opel's previous export drives were unprofitable because they focused on low-priced, high-volume vehicles.

In 2010, Opel sold 1.27 million cars in its European markets, including Russia and Turkey, and aims for sales of between 1.3 million and 1.4 million this year.