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  1. Analysis
May 30, 2008

FEATURE: POLAND: Chevrolet looks east for European growth

With annual sales topping 4.5m units in 2007 Chevrolet is by far GM’s biggest selling brand. A hefty 2.4m units of that total were chalked up in the US market alone. But Chevrolet is, in a sense, two brands within a brand and while there is some overlap, the Chevrolet product proposition in North America is very different to that elsewhere.

With annual sales topping 4.5m units in 2007 Chevrolet is by far GM’s biggest selling brand. A hefty 2.4m units of that total were chalked up in the US market alone. But Chevrolet is, in a sense, two brands within a brand and while there is some overlap, the Chevrolet product proposition in North America is very different to that elsewhere. 

And it’s the post-Daewoo (GM acquired the Daewoo car brand when it purchased the assets of bankrupt Daewoo Motor early in this decade and it subsequently decided to replace the Daewoo name with Chevrolet in markets outside Korea) development of Chevrolet as a GM global high-volume ‘value’ brand outside of the US that is currently delivering rapid volume growth to the gold bow-tie.

Lately, growth for Chevrolet has been particularly strong in Europe and within Europe a major driver is new demand in the developing automotive markets of Central and Eastern Europe (CEE).

Within the CEE area Russia stands out for volumes much bigger than the rest. The booming Russian car market has become by far Chevrolet’s largest national market in its European territory. Last year, almost 190,000 new Chevrolets were purchased there – an increase of almost 250% from 2004. At 46,000 units Chevrolet sales in neighbouring Ukraine surpassed those of Italy to make the Ukraine Chevrolet’s second biggest European market in 2007.

Overall, the Chevrolet brand grew its annual sales by almost 34% in 2007 to a total of 457,000 units.

“But this is just the beginning,” says Wayne Brannon, Executive Director of Chevrolet Europe. “In 2006, our production portfolio covered only 28% of all vehicle segments. By means of a thorough overhaul and expansion of the product range, we will have increased our market share to 65% by 2012 in those areas where we are present.”

Brannon believes that by 2013 Chevrolet could be selling over a million units annually in Europe.

His apparently bullish prognosis for Chevrolet’s volume prospects is based chiefly on the rapid growth ahead for demand in the CEE markets (including the lesser known ‘Stans’ – Kazakhstan and Uzbekistan), the concurrent installation of substantial local manufacturing capacity in the CEE sub-region and the planned full renewal of Daewoo Motor inherited product lines. There will also be expansion of the brand into new segments of the market.

“Paris this year will be a very big auto show for Chevrolet,” Brannon told just-auto.

Between 2008 and 2012 Chevrolet says at least ten new Chevrolet models will be introduced, including a roadgoing version of the Camaro concept car shown at the Detroit Auto Show in 2006.

GM is steadily integrating Chevrolet’s Daewoo inherited product lines onto GM’s generic global vehicle architectures. The next in line for that treatment is the new Lacetti/Nubira, which will be a Paris Show debut later this year. After that there’s an all-new Chevrolet Matiz due in two years’ time. For clues on the next Matiz (which will be developed and produced in Korea – GM’s global small car centre) look at the funky and sporty lines on the Beat concept shown at the New York Auto Show last year.

An all-new replacement for the Tacuma/Rezzo compact MPV is also on the drawing board and the Aveo is due a full model changeover for 2011, when it moves onto the GM small car Gamma II platform (or ‘vehicle architecture’ if you prefer).

Beyond that there is talk of small Chevrolet SUV/Crossovers (no, not the GM-AvtoVAZ JV-produced Niva – that’s more a local product for a particular time and place) and other small ‘monocabs’ too.

This week journalists from across Europe drove the revamped 3-door Chevrolet Aveo in and around the Polish city of Wroclaw (the car is built at Warsaw’s FSO plant). The 3-door Aveo model follows the 5-door and amounts to a heavy revamp of the current Kalos hatchback – a Daewoo Motor inheritance that has proven relatively successful in the European marketplace. The 3-door Aveo comes with a choice of 1.2 and 1.4 litre engines (the latter also available with an automatic transmission) and starts in the UK at a price of just GBP7,695.  

Reactions were generally favourable to this extensive mid-cycle revamp which includes new exterior styling tweaks – most notably the new nose which incorporates a large horizontally split radiator grille with a body coloured crossbeam that incorporates the gold Chevrolet bow-tie logo. The tail lights are redesigned, too. GM says the new Aveo engines deliver 14% more fuel economy that the predecessor powertrains due to technical refinements (there’s no diesel but a small diesel will be added with the next all-new Aveo).

CEE manufacturing expansion
GM says it builds where it sells and in 2007 it built some 425,200 vehicles in the CEE area. As it looks to sharply grow Chevrolet sales in the region over the next five years so Chevrolet manufacturing in the region will see a commensurate increase.

In 2008, approximately 60,000 Aveos will roll off the assembly line at the FSO plant (Fabryka Samochodów Osobowych) in Warsaw. By 2009, production is expected to increase to about 100,000 units. Production of the Aveo sedan, the first Chevrolet made in the European Union, commenced in November 2007.

“Production of the Aveo in Poland increases Chevrolet’s global build capacity and allows us to satisfy growing regional demand as well as shorten delivery times and distances,” says Brennan

The Warsaw FSO facility builds the Chevrolet Aveo in close cooperation with GM. The plant is actually owned by UkrAVTO and builds the Aveo under contract for GM.

In Ukraine UkrAVTO is already producing and marketing Chevrolet cars. In 2007, approximately 120,000 Chevrolet and Opel cars were built in Ukraine in Illichivsk near Odessa (Chevrolet models built there include the Lanos, Lacetti and Aveo). The Ukraine plant also ships to Russia.

In Russia itself, GM has its JV with AvtoVAZ (which Brannan maintains is ring-fenced and business-as-usual despite Renault’s recent stake in AvtoVAZ) making the Niva SUV and Viva sedan (55,000 production in 2007). A number of models are also made in the Kaliningrad enclave (48,400 SKD kits assembled in 2007).

By the end of 2008, a new GM plant with a capacity of 70,000 units will start production in St. Petersburg, Russia – initially making the Chevrolet Captiva.

GM is also looking to expand Chevrolet in the central Asian countries of Uzbekistan and Kazakhstan, countries that enjoy trading advantages with the countries of the former Soviet Union.

A joint venture between GM and UZAvtoSanoat was established in Uzbekistan on March of this year to take over production in a plant that has historical involvement as a contract assembler for Daewoo. In the medium term, 250,000 Chevrolets are expected to be built annually in Asaka, 350 km east of the capital city, Tashkent. Already today, Captivas, Epicas and Tacumas are assembled in the factory. The Lacetti is the next model scheduled to go into production there.

In Kazakhstan, AziaAvto, a GM partner company in Ust-Kamenogorsk, has been building Chevrolet passenger cars since June 2007. In 2008, approximately 4,000 Chevrolet Captivas, Epicas und Lacettis are expected to be assembled there.

It may be a brand with something of a split personality, but Chevrolet’s imminent global volume push looks set to build on its Daewoo-inherited value proposition, especially in Europe. Chevrolet has emerged extremely rapidly to be in the right places at the right time, and with the right product – the opportunity created through an astute acquisition and some clever brand management.

Drove the Chevy to the levee? I doubt many of Chevrolet’s new customers in places like Russia and Poland will sing that line, but then again, perhaps Chevrolet is simply getting back to the European roots of its Swiss co-founder, Louis Chevrolet. 

But hang on a sec. The European Monsieur Chevrolet who eventually emigrated to the US was well into his performance cars and might he be turning in his grave at the mere thought of a Chevy Matiz/Aveo/Tacoma etc? Yes, there’s that split personality thing again.

Hopefully, if he’s looking down, he can see that times are a changed and the Chevrolet brand is quite some mark to have left. Value motoring at internationally accepted quality levels for the newly motorising masses of Eastern Europe ain’t no bad thing surely. Moreover, Chevrolet’s international surge is helping to keep GM afloat. 

And there’s always that Camaro waiting in the wings for a little bit of added brand halo.

Dave Leggett

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