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MANY analysts in Europe are questioning whether GM was right to pull the plug on its European operations and offer Opel and Vauxhall for sale to PSA? On the face of it, the decision was inevitable — in fact way overdue — as the last year GM Europe reported a profit was in 1999.

GM spent a billion dollars in restructuring its European operations since 2012. The factories of Opel and Vauxhall operate at the highest technological and efficiency levels. Yet they failed to deliver the products that consumers want and failed to adapt and innovate enough to expand in a tough market

Opel has seen its market share in Europe shrink from 8.6 percent in 2006 to 6.6 percent in 2016. At the same time Kia has seen its share almost double from 1.5 to 2.8 percent during the same decade. Sales of Kia’s Sportage compact crossover rose by a third in Europe last year, reaching nearly 140,000 units, while Opel still has nothing to offer in such a crucial segment.

Europe is a mature market with demand growing at a very low rate due to replacement rather than population growth. The market is also dominated by compact cars with low profit margins — half of which has diesel engines that require high investment for clean emissions.

Despite being a single market, Europe has 31 countries each with its own regulations and taxation regimes. Cars produced in Europe are hard to sell elsewhere especially in emerging markets, being overpriced and over-equipped. They are also too small to sell in the US.

Former GM CEO Dan Akerson said five years ago that Europe has as much as 10 too many car factories. Since then only three have been shut. GM Europe was also late to catch on with the surge in demand for SUVs, was attacked from above by premium brands and from below by value companies from Korea and Eastern Europe.

GM is right to pull out of Europe but shares the blame for not adapting to the needs of a demanding and dynamic market. Adel Murad is a senior motoring and business journalist based in London.