Chevy expands global reach
November 3, 2011
Chevy expands global reach
Iconic brand looking to new markets in second 100 years
/ The Detroit News
General Motors Co. hopes to take Chevrolet — its blue jeans, rock ‘n’ roll, all-American brand — truly global in the next few years.
Already, Chevy is making inroads into new markets such as India, Uzbekistan and South Korea, where a growing middle class is creating a new generation of car buyers.
Chevrolet’s goal: To rival Volkswagen AG and Toyota Motor Co. in worldwide recognition, and to boost sales across the globe.
Chevy, which turns 100 years old today, already has made progress toward reaching that target.
The bow-tie brand is sold in more than 140 countries worldwide and has established enviable footholds in the fast-developing markets of India, China and Russia. North America continues to be Chevy’s largest and most lucrative market, where 1.57 million vehicles were sold last year.
Chevrolet was one of the few global brands to increase worldwide market share in 2010, and in the past five years Chevy’s sales have more than doubled outside North America and Europe.
It’s already a mainstay in Brazil, where the brand has sold cars since 1925. GM sold 685,000 Chevys in Brazil last year, making it the brand’s second-largest market.
Sales in China also are accelerating. China, the world’s fastest-growing auto market, accounted for nearly a half-million Chevy sales in 2010, up from 106,000 in 2005.
This year, Chevrolet will introduce seven models in South Korea, where GM has had a presence since its purchase of Daewoo Motors — now GM Korea — in 2001.
In fact, the Daewoo acquisition was a catalyst in helping strengthen GM’s presence on the world market. It gave GM crucial small-car design and engineering expertise, helping the Detroit automaker better compete in markets where compact and subcompact cars are favored, industry experts say.
Also aiding this effort is GM’s move to “global vehicles” — cars engineered once and sold globally with only minor tweaks for individual markets. To put it simply: The Cruze, whether sold in South America or Europe, is basically the same car.
“Behind the scenes of all this, you can’t have Chevrolet as a global brand without the global vehicle,” said Jeff Schuster, director of global forecasting for J.D. Power & Associates, an auto research firm.
“It’s not just focusing on several key markets,” he added. “It’s taking a more holistic view in their product planning.”
GM plans to have only two global brands: Chevrolet, for the mainstream buyer, and Cadillac, for the luxury set. GM’s Buick and GMC brands will remain specific to certain regions.
Still, analysts say Chevrolet has work to do before taking on Volkswagen and Toyota. Chevy is still considered a niche brand in many parts of the world. Its marketing efforts are often region-specific and lack worldwide consistency.
“GM is just sort of on the initial approach on this runway,” said Mike Robinet, director of global forecasting at IHS Automotive, a research and analysis firm. But, he added, “They need to go down this road. This fragmented approach is counterintuitive to a lot of the globalization going on these days at GM.”
The Chevy name, while conjuring images of Americana, is not as well-defined or universally recognizable as Toyota or even Ford, analysts say.
“The Ford brand is known as Ford in every market,” Schuster said. “Same with Volkswagen.” Chevrolet, on the other hand, is one of several brands sold worldwide by GM.
Europe also remains a challenge.
While GM is trying to expand Chevrolet’s European presence, it can’t permit the brand to step on the toes of GM’s German carmaker, Adam Opel GmbH, analysts say. Furthermore, Europe’s auto market has stagnated under the debt crisis, weighing down consumer confidence.
Most of Chevy’s growth on the continent is concentrated in Eastern Europe.
GM spokesman Tom Wilkinson acknowledges Chevy is still a relatively minor player in Europe, but added: “There is still a lot of growth opportunity there.”
In the meantime, he added, Chevy’s firm grounding in fast-growing markets such as China and Brazil will help balance any short-term setbacks in Europe.