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GM to Withdraw Chevrolet from Europe, Create Space for an Affordable Brand

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General Motors (GM) is sounding the retreat of the Chevrolet brand in Western Europe to concentrate on the Opel and Vauxhall brands. My first thought on this was that it paves the way for Chevrolet to sell its Camaro and Corvette sports cars (and any other niche models that could be in the pipeline) across Europe with the brand equity no longer being diluted by the group’s mainstream offerings from Korea. The bigger issue of course, however, is the withdrawal of these Korean offerings from the European marketplace. As GM seeks to take Opel/Vauxhall upmarket (hence the introduction of near-premium models such as the Cascada convertible and Adam city car), adding these models to GM’s European brands is clearly not advisable as it would jeopardise their aspirations.

Even if successful, the process of taking Opel and Vauxhall upmarket will naturally take time but I would argue that, even today, there is room for GM to introduce a brand positioned below Opel and Vauxhall to compete with budget brands such as Dacia and Skoda. In fact, GM may well have missed a trick by not developing Daewoo as a low-cost car brand. The fact of the matter is though that the Korean models currently imported into Europe as Chevrolets overlap uncomfortably with Opel and Vauxhall products and hence their poor sales performance and eventual withdrawal. Luca Ciferri, Editor of Automotive News Europe, has rightly written that “today’s Chevys can’t be sold at prices matching Dacia without causing massive financial losses.”

Interestingly, I raised the possibility of GM introducing a brand below Opel and Vauxhall in Europe and Henry Foy, motoring correspondent at the Financial Times, commented “Great theory, unlikely in practice given they struggle to even work out how to do low-cost in India...” This is a good point and got me thinking about how GM offers run-out models as Chevrolets in Brazil and India and used to use the Buick brand for the same purpose in China. It thus becomes clearer that GM would benefit from a low-cost car strategy not just in Europe but globally. If GM doesn’t wish to introduce a new brand for this purpose or even resurrect one of the numerous brands it has killed off over the years, it could take Ford’s approach instead and develop an “attainable small car” like the new Ka Concept, pictured below. Either way, with the retreat of Chevrolet, there will soon be space in GM’s line-up and showrooms in Europe too.

13-12-06 Ford Ka Concept.jpg

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