After existing as an almost entirely America-only brand since its foundation by race driver Louis Chevrolet in 1911, General Motors is moving ahead with an ambitious plan to launch its Chevrolet brand in Europe.
The idea is to market Chevy — a brand most Europeans know only through American films and television — as “cool, distinctive Americana,” according to Wayne Brannon, executive director of Chevrolet Europe.
The effort has so far seen tremendous success, he notes, making Chevy the fastest-growing brand on the continent with 34 percent sales growth.
“We are winning big time in the marketplace,” Brannon said.
If you feel the notion of Impalas on the Champs Elysees and Tahoes in Milan is discordant, you’re right. Chevy is, after all, a company that for years photographed its new models wearing a front license plate that read “USA 1,” referring to Chevy’s then-perennial status as the top-selling brand in America.
“V6 and V8 engines sound great in Detroit, but they sound horrible in other parts of the world,” observed Rebecca Lindland, director of industry research for Global Insight.
That’s why GM launched Chevy in Europe with an array of small cars sourced from the company’s Korean subsidiary, the former Daewoo. This of course begs the question of whether Europeans feel misled by the company offering Korean compacts while promising “cool, distinctive Americana.”
“We are a brand in transition,” Brannon explained. “We still have some of the former portfolio of products in place.”
Even so, it’s difficult for a global brand to market itself with one strong identity because it can have a different brand image in each of the countries where it’s sold, Lindland said.
Chevy’s enjoying success in Europe right now, helping GM to post the largest sales growth — 9 percent — of any manufacturer in the region in 2007.
“It’s really working out well for us,” remarked Carl-Peter Forster, president of GM Europe. Adding Chevrolet to the existing Opel brand (sold in the United Kingdom as Vauxhall) made a good combination, he said, because “the brands don’t have a lot of overlap.”
Over time, the Korean minicars sold in Europe will be replaced by more substantial vehicles from a variety of sources, including the United States. But first it was important to establish a foothold in the market with the kind of fuel-efficient, easy-to-park vehicles European consumers require.
This not only makes it practical for them to buy cars from Chevy as the company launches its effort, it also helps steer the public’s perception of the brand, said Brannon.
“The thinking was, ‘Chevrolet is too premium, it is not for me, they use too much fuel,’” he said. Selling small cars for a few years has helped open local consumers’ minds so that they now are willing to consider the bow-tie brand, he added.
With that necessary foundation of practical, affordable Euro-style small cars established Chevy will be positioned to start selling real American Chevys to satisfy those customers who want the real thing. The company already sells the Corvette in Europe, but that car was established previously as its own brand, separate from the Chevys being introduced now.
So the 2009 Camaro will be Chevy’s standard-bearer, providing authentic Americana to a limited number of customers. Because the Camaro is are not built with Europe’s new pedestrian protection standards in mind, sales are limited to 1,000 per year of each body style.
The flexibility of the definition of “body style,” however, means that the right-hand drive models for the United Kingdom count as a separate model, and so do convertibles, so Chevy can sell as many as 4,000 Camaros per year in Europe.
The next-generation Chevy Cobalt could also be a candidate for export to Europe, and that car will likely meet pedestrian protection requirements so it could be sold in larger volume. Future compact truck and SUV models are also obvious opportunities for Europe.
“We think we have the strongest pickup brand in the world, and we don’t have a pickup in Europe,” Brannon said. A planned Chevy compact SUV that is smaller than today’s Saturn Vue would also be suitable for the European market, he added.
How practical it is to expect GM will be able to export U.S.-built vehicles in volume remains to be seen, but the weaker dollar bolsters the case to do that, said Lindland.
“If the dollar is going to stay weak for years on end, and our forecast has it weak for at least five years, with that scenario in place it makes sense to at least look at exporting as much as you can,” he said.
Does that mean sending over a couple thousand Camaros, or something more substantive?
“It’s potentially enough volume to make a difference, particularly if the vehicle platforms are as global as they’re making them,” said Lindland. And the precedent of exporting from North America has already been established — just a few years ago Volkswagen exported 400,000 units out of Mexico, she recalled.
Today’s line of Korean-sourced Chevys will be replaced by cars that are either from the United States or are built elsewhere, but will still have a character and design that matches American-built models.
“Current models weren’t designed to be Chevys in the beginning,” Brannon acknowledged. “The new ones will have a more homogeneous look and they will feel like Chevrolets.”
Chevy’s U.S. image is strongly tied to the racing exploits of the late Dale Earnhardt and his NASCAR compatriots, and the company will similarly use racing to boost its image in Europe.
No, that doesn’t mean that the Chevy dealers in Belgium will tout the latest results from Daytona. Instead, the company is competing in the World Touring Car Championship (WTCC), a road-racing series that uses actual production car frames and bodies as the basis for their race cars.
This series is not yet very popular, even in Europe, but Chevy has found its customers appreciate the fact that the company is racing its cars, as if this confers a stamp of approval.
“The fact that we are racing makes them proud,” said Brannon.
Racing also gives dealers a promotional tool, when they exhibit race cars in their showrooms, according to Brannon. Dealers sell a special “WTCC Street Edition” of the Lacetti model raced in the series, cementing the connection to racing for enthusiast customers.
And the European market is set to provide even more sales growth for participants because of the acceleration in growth of car markets to the east.
Russia is poised to soon pass Germany as the largest market in Europe, for example. This has come as the result of improved reliability of commercial lending markets, reports Chris Lacey, GM’s executive director for central and Eastern Europe, and personal lending is now solidifying.
“Banking stability is a lot more important than political stability for car sales,” he said. “There is a lot more to come from these markets when personal finance comes into play.”