I have a lot of time for my friend and former colleague Dick Herdegen. We worked together at GM in the 1960s; Dick it was who came to Europe to introduce the Fisher Body Craftsman’s Guild to Vauxhall. Later he set up the first GM news broadcast network to all the company’s dealers. Herdegen has observed the motor industry from the inside, writes Karl Ludvigsen.
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This qualifies him well to have his letters frequently published by Automotive News, which identifies him as “a retired automotive executive” living in Michigan’s Bloomfield Hills.
But this time Dick Herdegen is wrong. During a trip to Europe, he said, he saw “a covey of small, unrecognised cars wearing the distinctive Chevrolet livery. The Chevrolet nameplate and bowtie were figuratively camouflaging the identity of Daewoo (Korean) products also made by General Motors.” Dick didn’t like this. He considered it the consequence of a “(mistaken) theory that a marketplace perception is far more important than the product itself,” asking, “Why can’t GM just be straightforward with the public?”
My friend felt that GM should have kept the Daewoo brand because “a quail is a quail and it doesn’t become an ostrich when it scurries across a border.” As an example of best practice he cited the way VW has nurtured its Skoda brand, which at one time was the butt of cruel jokes, at least in Britain. “Unlike GM,” he said, “VW resisted the temptation to play the name-change game.”
I don’t know about quails and ostriches, but this isn’t an apples-for-apples comparison. Skoda was and is a great international brand that needed help. It was the leading East European marque by far before VW stepped in, It had some useful export markets as well. It was VW’s commitment to keep the respected Skoda brand that helped it beat off Renault’s challenge for possession of the company.
Daewoo was an ostrich of another colour. It hadn’t really been in the car business long enough to have a recognisable profile, let alone one worth nurturing. Like all the Korean chaebol leaders Daewoo’s Chairman Kim felt that it was vital to use the company name as the automotive brand name, no matter how bizarre or irrelevant it might be in export markets. If it stood for anything, Daewoo was known for low prices and, in Britain, a factory-direct style of selling that failed to endure.
The use of “Chevrolet” as the company’s brand name outside Korea is a stroke of genius. It’s been a great auto brand since 1911 at the heart of GM’s most successful sales years. Chevrolet, prominent in Latin America, regained American sales leadership in 2005. That Chevrolet hasn’t previously been deployed as a brand in Europe in a major way has been a consequence of the lack of suitable product; USA-made Chevys were far too big. The availability of Daewoo product solved that problem.
Traditionally, of course, GM has looked to Opel and Vauxhall to be its European brands. This was fine during the decades when there was little challenge to them at the lower-priced end of the market. They could tolerate being undercut by Fiats and VWs; there was room in the market for all. That’s changed with the arrival of imports from Malaysia and Korea. There’s no way that European-built cars can compete on cost with them, let alone the coming exports from China.
Thus it’s to GM’s great credit that it strategised a positioning for Chevrolet in Europe that’s based on the ability of its Korean plants to produce both well and cheaply. The only way the strategy can stumble is if some well-meaning higher-up tries to set artificial product and segment boundaries between Opel/Vauxhall and Chevrolet, saying that one shouldn’t cannibalise the other. That would be a Big Mistake. Each brand should be allowed to find its own customer body.
So far I don’t see signs of such constraints. As the Korean company makes a transition away from Daewoo products to new designs it’s making a very good fist of its styling and equipment. The Epica it’s introducing at Geneva is a case in point. Called the Tosca in Korea, this is an impressive sedan with impeccable styling inside and out. Its bold five-spoke wheels communicate a “take no prisoners” attitude. The Epica will keep the transverse in-line six that’s been praised for its smoothness, a product of the tenure of Ulrich Bez as engineering chief at Daewoo.
Nor is there anything to be said against the SUV design first shown as the S3X concept car and soon to be in production. Its chassis is the basis for the T2X show car, a “sporty off-roader” crossover that’s won praise from critics and rival designers. It’s a tribute to the work of a 100-strong international team led by David Lyon and Max Wolff that’s carving out a distinctively feisty identity for future products from the former Daewoo factories. “What we want to do at Chevrolet is have a much more dramatic, bold, dynamic look,” says Lyon, “very powerful-looking cars, whether it’s a car or a truck, commuter car or whatever.”
Three Korean factories make more than a million vehicles a year with 18,000 staff and 2,000 engineers, the team that Bez built. Under the overall supervision of Welshman Nick Reilly they’re manufacturing products to be sold with the Daewoo, Chevrolet and Suzuki nameplates. The outfit is now officially GM-Daewoo Auto & Technology or GM-DAT, owned 52 percent by GM. The balance is held by Suzuki and China’s SAIC at ten percent each with the balance in the hands of a consortium of Chairman Kim’s creditors.
All this bodes well for the future of the Chevrolet brand in Europe, where GM-DAT can make serious money. It will soon be present in a big way as the creator of GM’s new Gamma platform, which will underpin the next generation of Opel/Vauxhall Corsa and Chevrolet Aveo and Matiz. Nick Reilly’s calling card to win this important project was the relatively low cost of engineers in Korea, reckoned at half European costs when social overheads are considered. Also helping, said Reilly, is “the long-hours culture here in Korea”.
With the coming introduction of the diesel engines needed to succeed in the Old World, Chevrolet is looking to raise its market share. From 0.9% in 2004 it rose to 1.2% in 2005, a jump in volume of 26.5% to 240,500 units. It plans to break well through 250,000 this year and be selling 300,000 in Europe in 2007, thanks to fresh product and broader market coverage.
It looks like we’ll be seeing a lot more of the distinctive Chevrolet bow-tie emblem, which William Crapo Durant discovered at Hot Springs, Virginia either in a newspaper or on his hotel-room wallpaper, depending on which legend you believe. As for the badging of other makes as “Chevrolet”, this is a tradition that goes back to the founding of the brand. Swiss-born Louis Chevrolet’s name was prominent in the racing world, thanks in part to his achievements as driver and tuner for Durant’s Buick racing team. Chevrolet started racing for Billy Durant in 1907.
By 1911 the bankers had booted Durant out of the company he’d founded, General Motors. He turned to Chevrolet to create a new car to be sold under the racer’s name. While Louis was developing a much too elaborate and costly six in Detroit, Durant was backing former Buick works manager William Little in his creation of a range of smaller, cheaper cars at a factory in Flint. When Chevrolet returned from a European trip in 1913 he found that previously-Little products which he did not fancy at all were being sold under his name.
In a supercharged huff Chevrolet left the enterprise. He was so disgusted with Durant’s high-handed actions that he sold his substantial shareholding in the Chevrolet Motor Car Company, the enterprise that would soon grow spectacularly and become the wedge with which Durant would prise his way back into General Motors. The Little car vanished and Chevrolet prevailed. Contrary to the reservations of some of Durant’s colleagues, Americans learned to pronounce it. Europeans will have it easier.
– Karl Ludvigsen
Karl Ludvigsen is an award-winning author, historian and consultant who has worked in senior positions for GM, Fiat and Ford. In the 1980s and 1990s he ran the London-based motor-industry management consultancy, Ludvigsen Associates. He is currently an independent consultant and the author of more than three dozen books about cars and the motor industry, including Creating the Customer-Driven Car Company.
