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NINETY EIGHT REGENCY

The Russian Connection: Chevrolet's Sales Across the Pond Fall Flat

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The Russian Connection: Chevrolet's Sales Across the Pond Fall Flat

Chevrolet's European sales figures are hoping to be 425,000 units in 2010; far from bad, but nowhere close to the million units GM is looking for over the next decade. For reference, Chevrolet Europe's sales dropped from an all-time high of 500,000 units in 2008.

A major problem in GM's planning is Russia, which was predicted to overtake Germany as the largest European market in the near future. Automotive sales in the Russian market plummeted by 50% last year to 1.45 million in 2009.

Autofacts, a division of PriceWatwerhouseCoopers, explains, "The financial crisis has underlined many structural weaknesses that will likely impact the future trajectory of the market."

Here's what the analysts have to say:

Walt Madeira (CSM Worldwide):

"I would think 425,000 this year is going to be difficult. Anything above 375,000 I would say is very good, but they will be hard-pressed to do even that. Long term, I would say 600,000 by 2015 or 2016 is more likely."

"The [Russian] scrapping program is aimed to help Russian manufacturers like Lada. Chevrolet's sales projections assume a recovery in Russia. If it was a three million market, they might end up selling 300,000 or 350,000 but that doesn't seem to be the case. Russia doesn't look like it's recovering as fast as China, Brazil or India."

Professor Ferdinand Dudenhoeffer (Center for Automotive Research, University of Duisberg-Essen):

"Do they have better models? No way because VW, Nissan-Renault, Kia-Hyundai, Fiat and many others have far better sales. Do they have a specific advantage in technology? It's just GM. Do they have better cost structures? No way...In a few years Chinese brands like BYD and Geely will be in Europe. They will increase sales by chasing Chevy drivers. The brand is very weak."

Jonathon Poskitt (J.D. Power and Associates):

"As Russia does make progress, Chevrolet will, of course, benefit from its significant presence there. There is room for Chevrolet to increase brand awareness in Europe and it will be helped by building on a solid portfolio of models and by entering new segments...I see Chevrolet competing more with the likes of Hyundai/Kia, Fiat, Suzuki, Mitsubishi, etc. than Opel."

Chevrolet's European range currently includes the new Spark city car, the Aveo supermini, the subcompact Lacetti, the Epica sedan, the Captiva SUV and the new Cruze sedan.

Within the next two years, GM will enhance the firm's line-up with the next-generation Aveo, the Orlando MPV and the Camaro which will be Chevy's halo car.

If anyone has thoughts on how to promote Chevrolet in Europe, drop your ideas in the comments section below.

- By Phil Alex

link:

http://carscoop.blogspot.com/2010/03/russian-connection-chevrolet-sales.html

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