In 2015, General Motors shocked the Eurasian auto market by announcing a wide-scale withdrawal of its Opel and Chevrolet brands. Opel, which GM owned at the time, was removed entirely from the market while Chevrolet was relegated to selling select high-end vehicles like the Tahoe, Camaro and Corvette. At the same time, the Detroit-based automaker decided to expand its Cadillac brand in the country. Removing Chevrolet was particularly bizarre, given that the Bow Tie brand enjoyed very healthy sales volumes and recently started operating a brand-new, state-of-the art production facility near the St. Petersburg metropolis. And though GM recently added a new vehicle – the Traverse – to the Chevrolet lineup in Russia, it’s still missing a major opportunity: off-road-oriented Chevrolet pickup trucks.
The key to understand about the Russian auto market is that Russians have an affinity for the Chevrolet brand. To this day, the Bow Tie enjoys a very healthy reputation and an even stronger desirability in that market. It’s “special” and “cool” to have a Chevy in Russia, as several folks – particularly taxi drivers – told us during a recent trip to St. Petersburg and Moscow. That point of view explains why the Chevrolet Niva continues to sell relatively well, consistently placing in Russia’s top 30-40 best-selling vehicles list. The Niva’s success is primarily attributed to the prized Chevy badge on the small utility vehicle. If it weren’t for the Bow Tie, the SUV – which ironically has zero GM/Chevrolet DNA – would likely enjoy significantly fewer sales, and much less interest.
And that brings us to the topic du jour: introducing off-road-oriented Chevrolet trucks – variants of the Colorado and/or Silverado – would further progress GM’s goal of competing in the higher end of the market, while providing additional sales volume and, ultimately, profits. In fact, GM provided that exact reasoning earlier this year when it launched the Traverse and Colorado in South Korea to purvey the “real American lifestyle” that Korean buyers typically haven’t experienced with the brand locally. That same line of thinking can be applied to the Russian market vis-Ã -vis the Colorado and Silverado. But wait, there’s more.
Much like in the U.S., off-roading and overlanding is a rapidly growing activity in Russia. And much like in America, both tend to be relatively expensive hobbies. To that end, Chevrolet has the right offerings to satisfy the growing need for capable off-roading and overlanding models – such as the Colorado ZR2 and Silverado Trail Boss. With many customers already buying capable off-road vehicles in the Russian market from the likes of Toyota and Mitsubishi (yes, Mitsubishi!), it wouldn’t be a huge stretch for GM to capitalize on the opportunity and turn those buyers into Chevrolet customers instead. Better yet, the 88 Chevrolet dealerships in Russia today should all have no issues selling and servicing the Colorado and Silverado, since they currently do so with the Tahoe.
As it stands, the Russian auto market sees anywhere between 1.6 million to 1.8 million annual new-car sales. According to market sales and registration data tracked by GM Authority and parent company Motrolix, about 100,000 of those are what could be considered off-road-oriented vehicles, such as the Toyota Forturer, Land Cruiser 200, Land Cruiser Prado, and Hilux, as well as the Mitsubishi Pajero, Pajero Sport and L200. None of those models are as capable as the aforementioned Chevrolet trucks, nor are they as unique or eye-catching in the Russian market.
In all, GM would create an overnight success in shipping off-road-capable variants of Chevrolet trucks like the Colorado ZR2 and Silverado Trail Boss variants in Russia, which it already sells in other markets like North America and the Middle East. With lots to win and little to lose, it’s a decision that should take place sooner rather than later, much like its recent decision to expand the Cadillac brand in Russia.
Until then, subscribe to GM Authority for the latest Chevrolet Colorado news, Silverado news, Chevrolet news and ongoing GM news coverage.
Comments
Outside of greater Europe, the markets gm has left are places notorious for corruption. Russia, India, Malaysia, vietnam south Africa etc…
That is a much greater reason than is given credit for.
The Korean comparison is apple’s and oranges as Korea has a free trade deal with most countries allowing easy export into korea.
You’re living in the 90s if you think corruption is a big thing in Russia today. Totally different country now with totally different climate.
Free trade agreement here is irrelevant because the quantity I believe is being discussed here is rather small and falls below any thresholds.
Lmfao Yeah, not a big thing lol
Corruption in Russia today is much stronger and more cynical than in the 90s.
There is not a single official who would not be corrupted.
People in Russia buy cheap pickups within 2.5 million rubles, their sales are small and these are low-cost options. Off-road versions would be too expensive and not in demand.
Ive lived in Russia.
You’ve lived there? I call major BS!
Everything about corruption that you describe in your comment smells of Russia’s 90s transitional economy and doesn’t ring true of what’s taking place today.
I travel to Russia for work every month… I have never seen so many high end , mostly German vehicles, as I do in Moscow or St. Petersburg.
The fact that Tahoe and Escalade sell out 100% of inventory every month should tell you about how lucrative the Colorado / Silverado opportunity identified by the writer is. Yes, the numbers for those models is relatively small… but it’s still profit for relatively minimal effort.
Are u a Kremlin troll?
Moscow and SPB is not the whole country. Look at the map.
And yes,russia is corrupted as hell. From Putin and his billionaire kids and friends to the small officials. Police and special services. U can’t tell me ur bs fairy tails. I’m not a regular guy. I know that country very well. I’m from Russia. Ne nesi xerniu))
Whatever you say Vlad.
Russia is wracked with corruption in organized crime, political crime and just plain larceny.
To invest there is at great risk.
Best to set up an independent importer and l let them take the risks. The market for high priced vehicles is limited at best.
Like Luigi you seem to be living in the past. Have you even been to the country? Don’t say, I already know the answer.
There is no more corruption in Russia than there is in the USA or Canada or Germany. Sorry to burst your bubble… so all that can be thrown out right away.
The opportunity identified by the author is actually pretty big… which is why Cadillac is expanding in Russia. If the opportunity were not big, Cadillac would not be planning fo double sales in Russia in the mid term future.
Inform yourself and step out of the US bubble… C8.R.
Expat is spot on. There was a time that corruption took place in Russia, primarily in the 90s. That is simply no longer the case. The country that Russia is today has little in common with what went on in the 90s.. people are earning more and the market is booming with the Korean brands (and some Chinese) growing exponentially. The market for luxury goods is growing quicker than in any other market globally, except for China.
C8.R – if you need further proof that the corruption argument is simply outdated and does not hold water, consider this: every automaker that does business in the U.S. also does so in Russia. But that’s not all – as most automakers and auto brands that are not present in the U.S. (Peugeot, Renault, and various Asian marques) also do business in Russia. If it were as bad as you describe, nobody would do business there, plain and simply.
Alex I do business with Russia often and it is not always secure or easy.
Also one major move by the government in the wrong direction can bring sanctions that can shut business down fast.
With a Russian ties to Iran, Syria. With their conflicts with the satellite countries it is a major risk.
Also there are two classes there and the Majority would not afford much of what GM has.
People buy low cost cars for a reason. Also Lada is bought yet because they are cheap.
Also theft is high. A friend of mine had a large amount of money stolen by Russians via wire transfer just a couple years ago trying to buy a Bizzarrini. He ended up losing $50k but that was small compared to what he wired.
At least in a China they hav3 skin in the game with controlling shares of the companies. They have enough interest to keep thing from going totally south. They do enough shady things in other areas.
Even there when I have seen things ordered everyone speaks English. When something goes wrong no one speaks English.
These countries are not like what we normally deal with so any investment is a greater risk.
Russia is a global pariah for many reasons not the least being the corruption. Sorry Alex the facts are against you.
The economy is poor:
Russia gdp growth rate for 2018 was 2.25%, a 0.62% increase from 2017.
Russia gdp growth rate for 2017 was 1.63%, a 1.3% increase from 2016.
Russia gdp growth rate for 2016 was 0.33%, a 2.64% increase from 2015.
Russia gdp growth rate for 2015 was -2.31%, a 3.01% decline from 2014.
They are led by a dictator for over a decade and have a decreasing population.
GM is missing what opportunity? What should be sacrificed to go after Russian market like you propose?
Alex and Expat sound like Russian bots to me haha
U have absolutely no idea about Russia, Alex. Don’t listen to the RT (russia today) propaganda.
Everything in Russia is eaten by the corruption. And the biggest thief is Putin.
I’m russian. I left Russia 2 years ago.