Chevrolet has set out very ambitious goals for Europe: the bow tie brand is looking to move one million vehicles per year in the continent by 2015, representing more than a 100 percent increase in sales. While that may seem cosmically out of touch with reality (the European car market is expected to experience a decrease in volume over the next few years), I believe Chevy will be able to meet its 2015 target.
Four words: no more Daewoo clones! That’s exactly how Chevy will get to a million vehicles in Europe.
Currently, the Chevrolet line in Europe consists of six nameplates and eight model variants (available after the break). Three of these nameplates are Daewoo rebadges from the mid-early 90s. These vehicles, specifically the Chevrolet/Daewoo Matiz, Aveo 3/5 door, and Lacetti sedan/wagon, are the least competitive vehicles in their segments.
GM’s plan is to phase out these old vehicles and replace them with new global Chevy products such as the new Spark, Aveo, Cruze, Orlando, Equinox, and Camaro. In effect, the new global Spark will replace the horrific Matiz, the new Aveo will replace the anemic Daewoo-built Aveo, and the Cruze will supersede Lacetti as well as Epica/Tosca in certain markets. Needless to say, Chevy’s new global vehicles represent the latest and greatest in mainstream automotive transportation and will be much more competitive with other marques in Europe and all over the globe. All this will result in a serious sales spike, one that should facilitate the bow tie brand to reach its sales goal.
Regardless of whether Chevy achieves its goal, selling global vehicles has a few overarching benefits for The General. First comes the image benefit of a global line-up. As consumers travel the world, they’ll see the same Chevrolet vehicles, whether they’re in North America, India, Europe, or China. While this may seem trivial at first, it’s important to popular perception, as the consumer will be able to recognize a Chevrolet no matter where s/he is. If, however, a U.S. resident travels to Europe and sees the current (horrific) Matiz wearing the Chevy bow tie, his/her perception of the entire Chevy brand may (and most likely will) suffer. This is a long-term benefit that is closely tied with reputation – something that isn’t build overnight.
The second benefit is more tangible and comes to us in the form of economies of scale (EOS). By manufacturing the same vehicles for worldwide consumption, GM/Chevrolet will be able to save a ton of money – from development, engineering, and production to tooling, support, and promotional/advertising material; a global vehicle requires only minor modifications (if any at all) to all these areas instead of a reinventing the wheel. GM will be able to recoup its investments in global models faster than it did before, leading to a more direct contribution margin and a more profitable General.
All this will allow Chevy to become a major force in the global automotive market and if not by 2015, Chevy Europe will reach one million vehicles at one point or another.
Currently, the European Chevrolet line is comprised of:
In approximately two-three years, the lineup will get a total makeover and include the following models:
- New Spark (carry over)
- New Aveo 3 door (tentative)
- New Aveo 5 door
- Cruze sedan (carry over)
- Cruze hatch (tentative)
- Cruze station wagon (tentative)