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The Persuader

My personal blog, started in 2006.



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08.12.2013

Flip-flop again: GM deems Chevrolet Europe strategy a failure

GM has changed its mind again: Chevrolet will not be its global brand.
   The strategy, where Daewoo was rebadged Chevrolet in western Europe at the beginning of the century, has been deemed a failure, and GM will withdraw its core Korean-made models such as the Spark, Aveo, Cruze and Malibu, by 2015. It will return to where it was a few decades ago: a brand selling quintessentially American cars such as the Camaro and Corvette.
   For many years on this blog, I expressed my doubts on rebadging Daewoos, either as Holden or Chevrolet. If GM wanted a budget brand, it had one in Daewoo. With the exception of the Malibu, the cars always looked Korean anyway, despite some US (and Australian) styling input, and Kia and Hyundai demonstrate that there is no negative brand equity these days with ‘Made in Korea’.
   It was impossible for GM to shake off Chevrolet’s American country-of-origin effect in the last decade in western Europe. GM also believes that having Opel and Vauxhall as its mainstream western European brand is enough.
   The theory wasn’t all wrong though. In the last decade we’ve seen the continued rise of Å koda, and Dacia has managed to find buyers. Nissan has brought back Datsun in an effort to appeal to cost-conscious consumers who want a simple car. Daewoo could have had a role to play in Europe, if GM had got the marketing right.
   It also seem to have got things wrong with Opel in Australia, pulling out after an even shorter time.
   I seem to be correct again when I argued that brands like Holden could not be abandoned in favour of Chevrolet, because you can never rely on GM for a long-term strategy. There are no economies of scale in promotion when Chevrolet simply isn’t as well regarded outside the Americas, and where we consumers are still quite happy to use certain domestic or regional brands as mental shortcuts to cars being sold as domestic appliances. Levitt isn’t to be applied blindly.

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Filed under: branding, business, cars, globalization, marketing, USA—Jack Yan @ 11.46

2 Responses to ‘Flip-flop again: GM deems Chevrolet Europe strategy a failure’

  1. Ken Westmoreland says:

    GM’s decision to introduce Chevrolaewoos into South Africa was even dumber, as it cannibalised Opel’s market share, especially as unlike Australia, the Corsa and Astra have been built or assembled locally. (The Vectra was never sold there, and since the Ascona was axed in 1986, there’s been no GM product in that segment in South Africa.) As in Australasia, in Latin America there’s been a move away from Opel-based models to GM Korea-based ones.

  2. Jack Yan says:

    Thank you, Ken, for providing the RSA perspective. Astra was probably GM’s most successful C-segment car of the last generation in this part of the world, and, in typical GM fashion, they destroyed all that goodwill with the Daewoo-derived models.
       I have noticed the shift in Latin America, too—the Cruze seems to have become the world car for GM—although one small saving grace are the Corsa B- and C-based models they still have that seem to command buyer loyalty there (e.g. Spin, Cobalt, Onix, Agile and Prisma). None are internationally competitive, in my mind, but it does seem GM in Argentina and Brazil are warier of the Daewoo line than we were.

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