Cesare Prati, Executive Director of Sales for Chevrolet Europe

Cesare Prati, Executive Director of Sales for Chevrolet Europe

The man charged with meeting General Motors' ambitious goal of selling 1m Chevrolet vehicles annually in Europe is Cesare Prati. How realistic is that target? Glenn Brooks spoke to this amiable Italian in Zürich where the media launch of the new Aveo model recently took place.

j-a: How long have you been in your present role?

CP: Two years.

j-a: And where did you work before that?

CP: Before that, I was in Germany; for two years I was marketing operations director for Opel-Vauxhall. Before that I spent 20 years in my country, in Italy, and the last position I had there was as managing director for the Opel brand, but other positions too, mainly in sales and marketing. I started as a trainee for General Motors 23 years ago.

j-a: Could you expand upon your responsibilities?

CP: My team and I establish sales targets; the national sales directors report to me. We also influence other areas such as marketing or PR and we are engaged in making strategic decisions for the regional operations of the Chevrolet brand.

j-a: What is the definition of Chevrolet Europe? How many countries?

CP: We are responsible for 15 legal entities. But one of these consists of 30 countries, because we have a cluster of markets embracing the area of Central Europe. For us, these markets such as the Czech Republic, Slovakia, Hungary, the Balkan states and so on, these we group into that one cluster.

j-a: And Russia, is that part of your remit?

CP: Sales and data for Russia are aggregated at a European level but our office in Zürich, that is to say Chevrolet Europe, it is not directly responsible for Russia. We used to have day-to-day dealings with Russia, but now it is an independent entity.

j-a: When did that separation take place and why?

CP: It was changed about a year ago when GM decided to establish independent entities in Russia for all the brands that are represented there. It's a global strategy that focuses on giving certain emerging countries some independence, in the same way that we (GM) manage Brazil, let's say China too - countries that have different needs than to what we have in Europe. Russia is still not a mature market and there is a lot of expansion still possible there. Also, the manufacturing operation is totally different there as to sell in Russia, you must also build or assemble cars. So the market there is quite different to what we have in western and central Europe.

j-a: Which is the top market in your own region?

CP: These days, for west and central Europe, the best market for sales is Italy, where Chevrolet has a long tradition. The segmentation favours very much small and medium cars. So then after Italy, we have Germany, Turkey - a fast-growing market - then we have Spain, UK and so on.

j-a: Why is Germany, the region's largest market, not Chevrolet's largest market?

CP: Our product portfolio is evolving now - by the end of 2011, we will be able to compete in two thirds (of the total European market) but until now, we were only in 30% of the European market. Small cars, medium cars, SUVs - this has been Chevrolet in Europe. So if you look at Germany and some other Northern European countries, the mini-segment (Spark, Aveo) is not particularly big. Now in a country like Italy, we have done well with LPG, with small cars. I'm pretty sure the picture will change in 2011 as cars like the Orlando, the Cruze hatchback, the new Aveo - as we launch these, we can grow significantly in many markets. We can rebalance the big markets in the region.

j-a: Will you push the Cruze hatchback as a rival for the Golf in Germany?

CP: The objective is to take a fair share of that segment. We want to be very price competitive. So for this reason, we are not targeting the Golf. This is one of the most important segments in Europe. In particular, in Germany, in the UK, the Cruze hatchback will be a very important new vehicle for Chevrolet.

j-a: Where do see Chevrolet sales a year from now, or by the end of 2012?

CP: Our objective is to get to between 4% and 5% of the total European market. So that means about 1m sales. But this is not next year.

j-a: That sounds very ambitious. When are you hoping to reach that number and could you be clear as to what the total European market would be as per a Chevrolet definition of Europe?

CP: It might take us five years to get there. Just adding up how much larger our extra models are going to allow us to become as a brand, I think we can get there. So let me define what I would call 'total Europe'. This year, we will sell about 160,000 units in Russia. So then, we also sell big volumes in countries like Uzbekistan, Kazakhstan - we are over-represented in these countries. In the western part of Europe we want to move from 1% to 2% to 3% or 4%. It sounds like a big number (1m sales) but consider that the total European market consists of more than 20m cars.

j-a: What are ambitions for your latest model, the new Aveo?

CP: The small segment is more than 20% of the European market. And then taking into account Russia where the smallest models are less important, that means that in western and central Europe this is an even bigger opportunity. With the old Aveo, our best result was about 120,000 cars in one year, so with the new model, as a minimum, we want to get there again. But I think we can do better with the new Aveo.

The bodystyles (sedan and hatchback) are correct, the engines; we have a good choice of petrol and diesel engines, infotainment; all the elements are in place with this car for customers to consider Chevrolet in the segment.

Design is of course subjective, but market research also supports our expectation that the car is very appealing. With the old car, we had a legacy design (a rebadging of the former Daewoo Gentra) but now we have a fully competitive car designed for the European market and the European customer.

j-a: You mentioned new segments earlier. The Asia-Pacific region will soon have a new Colorado. When will we see a Chevy pick-up in Europe?

CP: Well, GM has a very strong tradition in pick-ups. And the way GM works now is to look at all vehicles, wherever they are built, and to ask the question, 'could this product be right for this region?' After all, most of the cars we sell in Europe are produced in Korea. So, for us, pick-ups are an interesting niche - not very big as a segment - but I think a model like this would be very consistent for the perception of the Chevrolet brand.

j-a: The Epica hasn't been very successful in Europe. Will Europe get the replacement model, the Malibu?

CP: We have not made a decision yet but that decision will be made pretty soon.

j-a: As a man who wants more sales, surely you want the Malibu?

CP: As a sales director, I would like to have a car in every single segment (he laughs). Unfortunately, I can’t have everything. But, let's see.

j-a: What variables are in play for you to get a vehicle like that, effectively an extra new model? Talk me through the processes of the GM system.

CP: Well, first of all, we have to show that there is a market opportunity. Is the segment large enough? And then, we have to prove that we can meet that opportunity with the product we could have, in a way that is economically viable. So, it's a case of being able to get to a critical mass. We can't expect manufacturing to offer us what we want, regardless. There must always be a financial equation behind every case where we would consider a new product.

If you go to a segment such as a pick-up, or maybe something larger than a small or medium car, the volumes are not so large, so it is harder to make the decision in terms of volume. It's not a super-easy decision to make. You can get the right car from a technical point of view from GM, but maybe the financial side is harder. Sometimes, you can find that it can work, if you work with other regions to get the total volume that is needed to make the combined sales opportunity worthwhile.

j-a: You have one of the broadest range of vehicles in Europe. Chevrolet now stretches from the Spark to the Corvette. Why do you offer premium-priced models such as the Camaro and Corvette?

CP: These cars are part of the DNA of Chevrolet. When a European customer thinks about Chevrolet, they think of an American car. And the Camaro and Corvette are our halo models, so why not bring them here? The volume might be small but these cars show the emotional side of Chevrolet. Passion and practicality, this is the positioning of the brand. Passion from our big sports cars, with better practicality from our other models.

j-a: How many Camaros do you expect to sell in the first full year of European sales?

CP: In 2012, let's say maximum 2,000. In western and central Europe. The Camaro we want to see in as many countries as we can, and it will be sold by regular Chevrolet dealers.

j-a: Will this huge range of cars that you offer stop growing at some point?

CP:  Soon, we will be in two thirds of all European segments and even then, there is room to expand. We will never be in all segments but we don't want to keep any door closed. As part of a very large organisation, we have the opportunity to look at vehicles from other regions and if we would want to offer them to our customers, perhaps we can. Europe is a very demanding market and we have a lot of specific safety and emissions regulations to comply with, so it isn't always a simple process to add new models. But sometimes it is possible.

j-a: Are European customers ready for this expansion of the brand?

CP: The awareness of Chevrolet can only grow. Right now, we don't have rejecters, we only have people who have not heard about us, or maybe they only know a little bit about Chevrolet. Usually, we are not yet on a shopping list when people think about a new car. So, a lot of marketing, a lot of advertising - this is what is coming more and more, as well as the new models. And, we cannot succeed unless we have the correct dealerships in place, with the highest standards for our customers.

j-a: That sounds as if there are changes planned for the dealer networks.

CP: The dealer organisation has to grow as we are growing. We need to evolve our dealer coverage and we will do that over the next few years.

j-a: As Chevrolet and its dealers go after that million vehicle goal, which will be the high growth markets?

CP: Our mission should be to have a balance over all markets. It's like asking me if I'd prefer to sell a lot of cars in London, or instead all over the UK. If we are able to make a 5% market share in, let's say, Birmingham, then why not also in Norwich, London or wherever else? This is what I tell the dealers. The same applies at country level. If we have 5% in Spain, then that is what we should have across the whole of Europe. OK, segmentation is different in different markets but if we stay focused on retail sales, stay focused too on fleet, I think it's possible. We should of course look to Germany, Italy, UK, France and then also to Russia. But really, I want to see growth across all our markets, not just the biggest ones.