Chevy Takes The Exit Ramp In Europe
“See the USA in Your Chevrolet,” indeed, because you won’t be able to see Europe in a new Chevy going forward—unless you send the luggage ahead and scrunch up in a Corvette. In an announcement that seemed to catch the industry by surprise, General Motors announced yesterday that it was pulling “the fourth largest global automotive brand” out of the European market with the exception of “select” nameplates such as the Stingray.
It is "a sharp reversal of its global strategy for its most iconic brand,” as Nathan Bomey writes in the Detroit Free Press.
In a statement that carried the upbeat hed, “GM Strengthens its European Brand Strategy,” GM chairman and CEO Dan Akerson said: “Europe is a key region for GM that will benefit from a stronger Opel and Vauxhall and further emphasis on Cadillac. For Chevrolet, it will allow us to focus our investments where the opportunity for growth is greatest.”
If it’s any consolation, you will still be able to take a spanking new Chevy on a road trip around Russia’s Golden Ring for the foreseeable future. “The company will continue selling Chevrolets in Russia (and former Soviet Union states), which GM recently shifted into its European business unit,” Bomey reports.
“This is a win for all four brands,” Akerson maintained. “It’s especially positive for car buyers throughout Europe, who will be able to purchase vehicles from well-defined, vibrant GM brands.” And the company promised to continue to service vehicles and honor warranties.
Automotive News reports that there are about 1,900 Chevy dealers in Europe, with more than half also selling Opels. GM “will ‘work with individual dealers to determine their future,” according to Thomas Sedran, Chevrolet Europe president.
“Earlier this year, the company flew about 250 European dealers to Detroit to hear speeches and tour the GM Heritage Center to understand the history of Chevrolet and the depth of its offerings,” Sarah Sloat and Jeff Bennett observe in the Wall Street Journal.
But GM vice chairman Steve Girsky tells them “the Chevrolet brand never connected with European buyers or overcame its tarnished image shaped when GM decided in 2005 to sell re-badged Daewoo vehicles in Europe as Chevrolets.”
It no longer does so but most Chevrolet vehicles sold in Europe are produced in South Korea, reports Forbes’ Maggie McGrath. “GM said it will focus on profitability, cost management and sales opportunities in its Korean operations,” she writes.
Said Girsky: “There was just no brand consideration. We couldn’t just let this go on, and so with the support of the board we decided to change it.”
“It was a strategic mistake from the beginning to re-badge cheap Korean cars with the Chevrolet name that’s associated with large U.S. road cruisers,” Nord LB analyst Frank Schwope tells Bloomberg Businessweek’s Dorothee Tschampa.
The operational revamp “eliminates some competition from one of their own brands,” Bankhaus Metzle analyst Juergen Pieper points out to Tschampa. “But we need to keep a sense of proportion: Chevrolet has never been very successful in Europe, and there’s no guarantee Opel will automatically get its market share.”
In the New York Times, Jaclyn Trop cites a research note by RBC Capital Markets analyst Joseph Spak, who says the move makes sense. “The hope was that Chevy would be able to compete at the lower-end of the market and Opel would be able to move upscale, but this strategy never really gained traction,” Spak said.
“But what about that much-ballyhooed Chevy sponsorship deal with Manchester United?” you may be thinking — you know, the one that reportedly put the boil to the hot water that former global marketing chief Joel Ewanick found himself sitting in from almost the get-go.
Well, “despite the withdrawal, the car marque told Marketing Week there would be a ‘level of continuation of experiential and digital work’ across the region over the next two years, but the volume of it is currently ‘unclear,’” reports that publication’s Sebastian Joseph.
In any event, the nine-year deal apparently will likely stay intact. Premier League soccer, after all, has a global following, which was one of the prime reasons for the deal in the first place. And Manchester United has been a paradigm of how to build a global sports brand, as Bleacher Report’s Sam Pilger detailed in June. Chevy also has a deal with Liverpool FC.
“The Man-U deal isn’t so much about where they’re based but about the Man-U brand,” Chevrolet global CMO Tim Mahoney tells Forbes contributor Dale Buss, “and some people would say that they have ‘Super Bowl Sunday’ every time they play. They have about 600 million fans globally, and about 88% of that fan base is in emerging markets where we also want to grow.”
Add Brazil, India and China to that list of places you can see in your Chevrolet.