Chevrolet, which celebrates its centennial this year, has enjoyed success in eastern Europe by selling affordable Korean-built small cars -- but now the brand wants to win more buyers in western European markets such as Germany. The General Motors' division has seven new launches this year in a product offensive that will propel the brand into new segments and send out a message to competitors that it means business when it talks about doubling its annual European sales to 1 million, including Russia. Chevrolet Europe Managing Director Wayne Brannon talked about the brand's ambitions with Automotive News Europe Editor-in-Chief Harald Hamprecht.
Chevy's big challenge
GM division has seven new product launches as it targets growth in Europe
Meet the boss
Wayne Brannon, 56, is a veteran General Motors executive who had a varied global career before being named Chevrolet Europe head in 2006. The Detroit-born executive began his GM career in 1973 with Cadil-lac. After 15 years with GM's luxury brand, he had a stint in corporate marketing and planning before being appointed as GM's sales and marketing director for Africa. Before moving to Zurich to lead Chevrolet's Eu-ropean operations, he was head of sales and marketing for GM Latin America, Africa and Middle East.
Our biggest challenge is that many people still don't know us. Chevrolet was relaunched in Europe in 2005 with a new lineup of mini, small and compact cars. Only about 5 percent of customers know the car models we offer and naturally only a selection of those put us on their consideration list. The good news is that we will be selling more than 500,000 cars across Europe this year, despite such low awareness.
Yes! What better way to celebrate our 100th anniversary as a brand than to launch seven new cars in one year? Especially as we are entering new segments, like with the Orlando seven-seat family van, which has been available since February. The new Captiva SUV has been at dealers since April with new engines. In July, we launched the all-new Aveo. Now we are presenting the Cruze hatch-back. In November, the new Corvette Grand Sport, Camaro coupe and convertible and the Volt electric car with range extender will be at European dealerships. If you visit a Chevrolet showroom toward the end of the year, you won't find a model that's more than 2 years old.
Exactly. The good news is that we will be selling more than 500,000 cars across Europe this year, despite such low awareness. So our biggest challenge is to let the customers know we are selling great-looking cars that are affordable and have the right characteristics for the European market.
About 80 percent of customers know that Chevrolet is an American car brand. They know our iconic sports cars and some people still think of larger SUVs. Our challenge is to help them understand that we have a full lineup of mini, small and compact cars, a compact SUV and sports cars, as well as the Volt.
By the end of this year, we will be offering 12 models. With this portfolio, we will cover about 50 percent of the market segments. And of course we would like to further increase the number. At the Frankfurt auto show we will show the new Malibu, which will be in Europe in 2012, and the Colorado show truck. We are also mulling over a couple of other variants of our existing models. Ideally, we want to be present in two-thirds of the market.
At the Frankfurt auto show we will show the new Malibu which will be in Europe in 2012 and the Colorado Show Truck. We are also mulling over a couple of other variants of our existing models. Ideally, we want to be present in two-thirds of the market.
We had a relatively small lineup for several years, which meant less complexity and investment for the dealers. Of course, we will try to keep that but the reality is that we will soon cover the most important segments of the market. We will increase our training activities to enhance business opportunities. We will encourage our multibrand dealer partners to focus more on Chevrolet. So far, we have about 600 dealers who sell and service Chevrolet exclusively, but 70 percent of our dealer network follows a dual or multibrand approach. We would like to see the number of single brand stores grow. And we aim to be fairly represented in multibrand dealerships, based on our expanded product portfolio.
We have about 2,000 dealer outlets throughout Europe. Over the next couple of years, we may plug some geographical gaps, but we do not necessarily need more stores to accomplish our volume growth. The dealers will have more space available for our growing portfolio. More refinement is our message, as we get in touch with new customer groups.
There are specific requirements and investments necessary, e.g. in training, so we are going to let our dealers decide for themselves whether to take these cars into their showrooms. The ones who do are typically located in or near bigger cities. I would like to have enough coverage for these cars, as the Corvette, for example, has been in the market for 58 years now and enjoys iconic status.
Currently we plan to sell between 1,000 and 1,500 Corvettes across Europe. On top, we will sell about 2,000 Camaros.
We expect to sell between 1,000 and 2,000 Volts in a full year across Europe.
When Chevrolet was relaunched in Europe in 2005, we doubled our business to over 500,000 units of annual sales within three years. Last year, we sold 477,194 in 35 European countries including Russia and Turkey. This year it will be roughly half a million again. And I have always said once the recession is over, and we are not quite there yet, it will take another five years to double our sales again, to 1 million cars. The 2016 time frame could still be a fair date for this goal.
The development of one of our Japanese competitors from a 1.5 percent to a 5 percent share took about 10 years. We have been on that track for the last five to six years. Our mid-term goal is a 4 percent to 5 percent market share in Europe after 2.5 percent in 2010. I am still optimistic that we can achieve that, but we want to grow profitably. My target is to move our unaided awareness closer to the levels that our competitors enjoy, from below 10 percent to above 20 percent.
Our top five European countries in terms of unit sales this year are Russia, Italy, Germany, France and Turkey. We want to be even more successful in Germany, Italy, Spain, France and the UK. We are looking for more balance. We already have a 2.5 percent to 3.5 percent market share in central and eastern European markets, but 70 percent to 80 percent of the total market derives from the top five countries where we are a 1.3 percent brand, and where we would like to be a 2.5 percent share brand. Of course we know that this is a challenge. If you take Germany for example, 60 percent to 70 percent of sales go to the German brands; it is difficult to gain share and business there.
The Spark minicar this year constitutes about 24 percent of Chevrolet sales, followed by the Aveo (18 percent) and the Cruze sedan (14 percent).
Some markets are up, some are down. I expect an overall market size of 19 million this year, up about 300,000 for total Europe. Growth will come from central and eastern Europe. Germany is moving in the right direction but Portugal, Spain, Italy and Greece are really down. I do not expect 2012 to differ much from 2011. For the 2013 to 2015 period, I expect a little growth again.
We are, of course, in competition with Ford and Volkswagen in some segments, but our main competitors are the non-European brands like Hyundai, Kia and Toyota. By the way, Ford has done an excellent job in becoming considered a European brand. Chrysler and Dodge have become niche brands in Europe and Jeep is an SUV brand really. So, as the only American brand with a full lineup and with some volume, we can be an interesting alternative.
Our brand is focusing on a global portfolio with cars like the Aveo and Cruze, which are produced in North America and South Korea but we will soon sell three models that are only produced in North America: the Camaro, Corvette and Volt. This is our sourcing reality today, but this will further diversify. Our founder, Louis Chevrolet, was born in Switzerland and emigrated to the U.S. to grab his opportunities as a race driver, engineer and entrepreneur.
Louis Chevrolet was an innovator and inventor, and an ambitious race driver. We still have a rich racing DNA – with Corvette and Cruze leading in the World Touring Car Championship. The Chevrolet brand is featured in more than 600 song lyrics. No other brand in the world is connected to pop culture in that way. That message and connection to the USA extends nicely around the world and it is an important pillar of our strategy. But what is fundamental is the brand's human values, which are not American, European, Chinese or Korean. Optimism and opportunity is what Chevrolet is known for and being connected to the American spirit and way of life. We do not own these things, but we embrace them. Chevrolet offers real cars for real people, the everyday heroes who take care of their families but want to do that with style.
We have production in Russia (GM plant in St. Petersburg; joint venture production in Togliatti; next year with GAZ in Nizhny Novogorod) and in Uzbekistan, for the local markets. There are no immediate plans to build Chevrolet cars at GM plants in western and central Europe. Let's see what the future brings.
We are not releasing profit numbers as they get consolidated into GM International Operations. I just can say that the Chevy business in Europe over the last five years has been very successful. And we will continue this success story.