Susan Docherty

Susan Docherty

Wayne Brannon, Chevrolet Europe's former president and managing director, retired late last year. His successor, who took up her current position on 1 January 2012, is Susan Docherty, a Canadian national who had hitherto spent much, but not all, of her career in various senior sales and marketing roles in the US. While now based in Zurich, Docherty also retains her duties as a board member of GM Korea.

j-a: Before we speak about the division's performance and your plans, could you define the geographic area of Chevrolet Europe, which by GM's definition excludes Russia?

SD: Sure. So, it's Western and Central Europe, and you're right, not Russia - that's run by another part of GM - but in my role I am also responsible for Cadillac in Europe.

j-a: You were head of sales, marketing and aftersales for GM's International Operations division prior to taking on your current role. How was it to shift regions?

SD: You know, this isn't my first foray to Europe. I lived here in 1995 and 1996 in Switzerland, and 1997 and 1998 in Germany.

j-a: You come from a very different background to your predecessor in this new role.

SD: Well, for the last two years I was vice president of those three roles you mentioned - sales, marketing and aftersales - based in Shanghai, and I had responsibility for Asia, North and South Africa, all of the Middle East, along with Russia/CIS, plus Australia and New Zealand.

j-a: So returning to Europe after such a long time in other parts of the world, how are you approaching the multiple challenges of this region, and what goals have you set for yourself and Chevrolet Europe?

SD: First of all, I come at a time when the team throughout the 2011 calendar year has been launching all kinds of new products. I feel very privileged to accept the baton from Wayne Brannon and continue to lead with all the great work he did - he and his team launched seven new products. So we're continuing our new product offensive here in Europe in 2012, and the new Cruze station wagon is our tenth new entry in 18 months. My personal goal is, regardless of what's going on in so many markets, I want Chevrolet Europe to be up in every month of this year. I've told my team not to aim for specific numbers, because we don't know what's going to happen to the industry or how quickly the debt crisis is going to resolve itself - I think it's going to take a significant amount of time.

I lived in the United States through our bankruptcy and when we had to completely restructure and go from over 16 million annual vehicle sales to below 10 million. So I say to my team here, OK the industry in Europe isn't what it used to be but there are still 15 and a half maybe 16 million people in Western and Central Europe who want to go buy a new car. I don't want us to use the excuse of 'OK, so the industry's down and we can't hit our numbers' but instead our reality is that with the exception of our new wagon we have a full year of one of the freshest model ranges in Europe. And we also have full availability of diesels that we did not have in 2011 due to the tsunami, plus we now have the Aveo diesel in the B segment which we did not have with the old-shape model.

j-a: Are you profitable in Europe?

SD: Our goal is profitability but not all of our vehicles are profitable - launching so many vehicles in a short time isn't cheap - but the goal is every single one of them will be profitable in every country.

j-a: How are you managing not only the costs of the cars you bring in from the three countries you source cars from, Korea, the US and Canada, but also the currency volatility in the many markets where you sell?

SD: I'm clear to my team about the things I can control and I can't stay awake at night thinking about exchange: I can't control the won, the US dollar, the euro and so on. But what we can control is mix on a country by country basis: there are some of our cars that do better in some countries versus others. What you work on if you're in my role is mix optimisation and making sure that if you've got a ton of competitive pressure - if there's lots of discounting happening in a particular country and a particular segment, then I'm very apt to divert that product to another country where I'm not having to discount it.

You know, you have to stay on this every single week. You have to look at what our competitors are doing, how they're responding to a market that's going through a crisis. I can give you one example of what crops up: in Italy, we have had a logistics strike where we couldn't deliver products for over two weeks, so if I've got boats bringing in cars from Korea, I can shift those cars to other markets.

We're real clear that as a sales and marketing operation, we have to control our structural cost. Our team is very lean, and if you look at sales per employee we've got one of the highest in Europe, but you have to constantly work on ways to maximise revenue and keep your cost levels down.

j-a: I know that Chevrolet Europe is a sales company - there is no manufacturing function in this region. But hypothetically, if you want cars - for example the models in the largest segments, the Aveo and Cruze - if you want them built in Europe to minimise your exchange rate risk, can you talk directly to (Opel-Vauxhall CEO) Karl Stracke about that?

SD: OK, so both our Chevrolet and Cadillac Europe operation reports to General Motors International Operations. My boss is Tim Lee, out of Shanghai, so my old boss is also my new boss even though I'm now in Europe. Opel-Vauxhall is a very different organisation.

In terms of manufacturing on European soil, we've always had a belief in the company that we want to be able to build where we sell but we do not do that here. I'm a board member of GM Korea and I'm very happy with the quality and the competitiveness of the products we get out of Korea. Does sourcing from there present some challenges with lead times of new cars? Yes, but these are manageable. Is it (manufacturing in Europe) something that we're going to look at in the future? Probably, but that wouldn't solve the overcapacity problems that currently exist in Europe.

j-a: So your relationship with Opel-Vauxhall is that of a competitor.

SD: No, not at all. You have to view it in the same way as in the United States where we've got Chevy-Buick-GMC, where each one of those brands has a distinct role and a distinct target customer, and we know based on customer research - this isn't a Susan comment - when people are out looking at an Opel, what's also on their shopping list will be a Volkswagen or a Peugeot. But people with a Chevrolet on their shopping list will not be looking at an Opel. The products look different, they are different - I'm not competing with other GM brands. You know, the four brands in Europe - Opel, Vauxhall, Chevrolet and Cadillac - there's room in a market of 16 million vehicles for all of them and for each to have its own customers.

j-a: After all these product launches there are now very few gaps in the Chevrolet Europe range. But when are we going to see a small SUV?

SD: I can't tell you that right now but if you consider the days when we had our 'legacy' products, the cars from Daewoo, we had only three or four products but now we have ten vehicles covering 50 percent of all the segments that are out there. As for a small SUV, there's nothing to say but stay tuned.

j-a: What expectations do you have for the new Malibu?

SD: Segment D is one that's obviously going to be the smallest for us, while the B segment where Aveo is is as a matter of fact where about 25 percent of our volume is - it's the same percentage as that segment's share of the European market so they just happen to match up. But Malibu, that's our flagship sedan, it's cliniced really well and you can see Camaro in the design of the rear end: we really what to put a little bit of Corvette and Camaro into all of our products and the Malibu is just the latest example of that.

As for volume, we've just shipped cars with the gas engine to dealers but later when we put the 2.0-litre diesel into that car in the back half of this year, we should see some volume with that car. For now, I can't give you an exact figure for sales expectations.

j-a: Do you see the Malibu as a direct rival for the Passat?

SD: Dynamically, and I've driven the car, I've driven the diesel in Korea, it can absolutely compete. But I'm interested to see what Europeans think of the car. The difference is that in North America and some other regions, we've had the prior Malibu but here it's a new name for us so I'm not going to make any sales predictions.

j-a: We're seeing volume manufacturers pushing hard into that segment, even though it's been in decline, and so much of the volume in the bigger markets is for wagons. Why isn't there a Malibu wagon?

SD: With wagons, we need to start with the Cruze as that's one of the largest segments. And now we have the product for the C segment. The Malibu is now a global model, like the Cruze: we're producing it in Korea, China and the US. The only market that would be interested in a Malibu station wagon would be Europe. Now when you add a bodystyle, to any model, from a capital standpoint, it's an expensive proposition. So I want to see us winning with the wagon we've just added (Cruze) and win with Malibu (sedan) and take it from there.

j-a: You're about to launch the Volt in many European markets and now suddenly GM has announced a five-week production stoppage. Has that affected your launch timing?

SD: Not at all. First of all, we had a special break-point in the plant, where we stopped production to put a special protective casing around the battery in November/December. So those cars on the boats coming to us right now, they've got the casing and we're just now getting ready to launch. In February, we had only sold two vehicles. They were sold to the US embassy in France so we're now getting some retrofitting done on the inventory that's already here and that will be done by the end of March.

I wouldn't 'overtrain' on the fact that we're pulling back on production in the plant. The way we're running today's GM is very different to the way it's run in the past. What we're going to do, is we're going to shut down a plant for a week or two sometimes if we get supply out of whack with demand. We're no longer going to continue to build big inventories and then put big incentives on them.

The model that you see us operating under right now enabled us to earn US$7.3bn in 2011. You don't go from having lost billions twenty four months prior to making billions twenty four months later if you're not adjusting your model. I don't think that those who are reporting on us always understand how much we have changed our model. And none of this is a panic call, it's not pulling the Andon cord when we stop production - it's making sure you don't have oversupply.

j-a: What can you tell us about Chevrolet Europe's plans for EVs?

SD: Well, we're just launching Volt. In my 25-year career at GM I've never had as many people come up to me and ask about the car I'm driving. I've had the car since December 26th and I've never put gasoline in it.

j-a: I was trying to get you to talk about the plug-in Spark or maybe other pure EVs...

SD: (grins) Nothing to announce right now. But we've got to win with Volt first. And I want to add that we're going to have more demand for Volt than cars we can supply and that's a good position to be in right now.