Chevrolet Europe Case Analysis
MBA652: Marketing Strategy
Europe is globally one of the largest market of General Motors. According to GM’s report; revenue in 2003 which is US$ 27.5 billion is above the amount of the previous year 2002 which is US$23.9 billion.
After taking on part ownership of Daewoo Motor Company of Seoul, Korea in 2002, GM also started to control the management of automobile business. The GM Corporation has three main car brands which are Opel/Vauxhall, Saab, and GM Daewoo. Opel/Vauxhall is mostly sold in European Countries, especially in ...view middle of the document...
French brands are known as innovative and comfortable. Italian brands are known as stylish but suspicious in quality. There are 8 leading automakers in Europe, which are the Volkswagen Group, the Peugeot Group, Renault, Ford, GM, Fiat Group, DaimlerChrysler, and BMW. 83.9 percent of passenger car unit sale in 2003 was recorded under these automakers. The Volkswagen Group is the top in the market with its brands like Volkswagen, Audi, Seat, and Skoda brands. Opel/Vauxhall also recorded a good rate in the market.
In European market, the Chevrolet was not a popular brand around 2004. According to a survey made Europe, only 1 percent of car buyers knew the brand. The middle class including blue-collar workers consist of 12 percent of car owners. And they tend to buying Ford, Opel/Vauxhall, Fiat, and Volkswagen’s Skoda. GM Daewoo is also a lower middle class car. Hence, the target group of Chevrolet, as it’s aimed to convert the GM Daewoo to Chevrolet, will be the middle and lower class.
Patricia Messer and Project Midas came together in a meeting to discuss about the strategy to convert GM Daewoo brand to Chevrolet in European passenger car market. The main purpose of this gathering as to brainstorm and find out a good solution to introduce the Chevrolet brand and a way to do it without alteration in the current product line of GM Daewoo, model characteristics, GM cover price, current distributions ways and dealer issues.
Root Problem Components
The Daewoo Motor Company lost its reputation and reliability in the market, especially in Europe after bankruptcy because of its heavy debts. The problem was about the quality of the products and lack of ability to develop new products and the increase in product price. Failure in finding good strategy and being weak in advertising area could be considered as other reasons which impacted the image adversely.
* General Motors has a strong reputation for its name, a well-known company.
* One of the leaders in auto manufacturers industry in Europe
* Spends enough in advertising like Ford Motor, Volkswagen.
* 20 % of unit sale comes from Europe in which 11 production facilities are active.
* Directors, decision makers are forward-looking and very active. They don’t miss the details as in Project Midas group.
* The Chevrolet brand was unknown, but this can be turned into an advantage, a strength for the company as the brand is unknown, it might be perceived as a new brand if the introduction and advertising is made well enough.
* One of the problem of Daewoo is lack of focus on advertising issues. They did not spend enough money to introduce the brand well.
* The perception of “cheap car” for GM Daewoo alongside with other brands.