End of the road for Chevrolet in Europe

IceDiamond

Saw this about Chevrolet being pulled out of Europe


http://www.bbc.co.uk/news/business-25237227


Not surprising considering they've got the lowest sales figures for the UK.

agrinnall

Hardly surprising when every car they sell (even the iconic ones, although they have a certain cachet) are worse than rival marques.

Beachview_2

True, they're absolute rubbish.

jase1

Rather interesting, this.

It was only a few months ago that GM were talking about making Opel/Vauxhall the 'premium' brand, with Chevrolet taking over as the workaday fleet marque.

This decision turns all that on its head -- and don't for one minute think this means the end for Daewoo-built cars in Europe.

GMDAT are very much being tooled as the small car hub for GM worldwide. The next Corsa is likely to be built there.

In essence, it's likely that in the years to come, all small Vauxhalls (Corsas and Astras), along with the 4x4 offerings, will simply come into Europe, badged as Vauxhalls but built in Korea. This already happens in Australia and the USA.

It's actually quite a clever move, as GM must surely know that you could put a Vauxhall badge on a Lada and the sheep in the UK would buy it in droves.

This decision removes the brand confusion currently present, but ultimately is likely to fatally wound GM Europe as a volume car producer.

Don't believe me? Think about the latest Vauxhall small car, the Mokka. Engineered in Germany but built in Korea. That car is the blueprint for future Vauxhall small vehicles -- and with the non-premium family car market (Insignia) dying on its !!!!, in favour of small cars and crossovers (the exact cars GMDAT are building for the world markets), this doesn't leave much wriggle-room for the European division.

Daewoo's factories are vast, modern and efficient. By comparison Europe's are small, dated and loss-making. Only a matter of time.

The only problem currently is the crappy brand -- and this is now nipped in the bud. Chevrolet really is a millstone around GM's neck in branding terms in Europe -- the Chevy-branded cars have to be much cheaper than Vauxhalls to sell, which means that they are compelled to put out sub-standard product into the market place (or at least this is the result of GM thinking on the matter). Far, far better to have Korea as a centre of excellence, producing a certain type of vehicle, and tailor individual exports to their target market. So we'll see a Corsa in the UK which is identical to an Aveo in Russia, but with the Russian car stripped back and with an inferior interior/suspension setup, and the UK car tarted up so the buyers here are fooled into thinking it's 'better'. Job done.

k12479

jase1 wrote: »

This decision turns all that on its head -- and don't for one minute think this means the end for Daewoo-built cars in Europe.

GMDAT are very much being tooled as the small car hub for GM worldwide. The next Corsa is likely to be built there.

In essence, it's likely that in the years to come, all small Vauxhalls (Corsas and Astras), along with the 4x4 offerings, will simply come into Europe, badged as Vauxhalls but built in Korea. This already happens in Australia and the USA.

This decision removes the brand confusion currently present, but ultimately is likely to fatally wound GM Europe as a volume car producer.

I disagree. Korea may well become GMs centre for small car development, but unlikely to be a centre for small car production, in fact it already looks like its fading http://www.reuters.com/article/2013/08/12/us-korea-auto-idUSBRE97A0DH20130812. Mass market cars generally have to be made in the region they'll be sold to make them cost effective. Otherwise, changes in exchange rate can quickly cause big losses. This affected e.g the first Mondeo that was imported into the US from Europe and Holdens imported to the US as Pontiacs. The fact that Hyundai set up in Europe backs this up.

The GMs imported into the US from Korea seem to generally be Buicks, but Buick only appears to have survived (while Pontiac and Oldmobile didn't) because it's a well regarded brandname in China. Australia is a different case because their domestic industry is dying.

Opel/Vauxhall's 4x4s and MPV seem to be low sellers, so I expect they may well be/continue to be imported into Europe, but the big volume sellers Astra and Insignia(?) even if they are eventually designed in Asia, would still likely be produced in Europe. If they aren't, then GM is likely to stop being a volume seller, let alone producer, in Europe.

I agree with you about brand confusion. The US makers don't seem to be able to get this right in Europe, hence the end of Saab, breaking up of Ford's PAG, etc. Daewoo eventually managed to get some kind of public awareness in the UK at least, seemed foolish to then go and replace that with Chevrolet which probably means little to most people in Europe.

jase1 wrote: »

Daewoo's factories are vast, modern and efficient. By comparison Europe's are small, dated and loss-making. Only a matter of time.

That's why you go East and build new factories, but not too far East - Romania, Czech Republic, Turkey are far enough. The same thing the French manufacturers didn't do due to politics and are now suffering for.

jase1 wrote: »

- the Chevy-branded cars have to be much cheaper than Vauxhalls to sell...

But Korean cars are budget products. By protecting their domestic marketplace they've managed to build an industry, but not a world class one. Now they're going out in the world, improving their products and will have to compete with world-class products. Exactly what the Japanese did decades before.

colino

The whole car industry is in flux, those epic battles that take place between Ford and Holden (GM) in Australia? Going to vanish because both are pulling out of manufacturing "no matter what government subsidy offered" by the end of 2016. Too much competition from Japan has been a problem, now Korea and China (who are restarting Saab) means they both know the end is nigh.

[Deleted User]

RIP Chevy Matiz

GolfBravo

colino wrote: »

Too much competition from Japan has been a problem, now Korea and China (who are restarting Saab) means they both know the end is nigh.

Korea? This is nothing compared to the next stage: China.

Just look at this:

Qoros, the first Chinese car with:
- 5-star NCAP, thanks to ex-GM Saab engineers under Roger Malkusson
- based on a modular platform, estate/mpv/suv to follow soon
- styling by Gert Hildebrand - he did the first BMW Mini, and lives in Shanghai now
- Microsoft infotainment system, so no need for a €800 Blaupunkt unit
- 1.6 156PS turbocharged engine by ex-BMW engineers and AVL Powertrains in Austria (they also have a R&D centre in Munich)
- suspension and brakes by ex-GM Holden engineers (working mostly from home in Melbourne), braking 62-0 MPH = 38 metres
- good interior and ergonomics (by ex-Volkswagen staff)
- 6-speed dual-clutch automatic Getrag transmission

In Europe next year, top spec car with leather/sunroof/internet/etc for under €21000.

They employ only 1100 staff (only 150 engineers) and their greenfield factory output for 2014 is 150K cars, and 350K+ from 2016.

GM, Ford, PSA, Renault, etc. all have huge legacy costs: under-utilised and ageing factories, expensive pensions, etc. And on the other hand the barriers to entry are very low now - you can outsource all engineering work globally (thanks to the internet), there are plenty of available factories ready to build anything you like, and the only challenges are the dealer network (or lack there of) and branding.

k12479

GolfBravo wrote: »

And on the other hand the barriers to entry are very low now - you can outsource all engineering work globally (thanks to the internet), there are plenty of available factories ready to build anything you like, and the only challenges are the dealer network (or lack there of) and branding.

How are the barriers to entry very low? Outsourcing work is not new, it's been going on for decades, but if you can go out and buy all the bits you need, then so can everyone else.

A factory is only the start, the automotive industry has a huge supply chain. Perhaps more complex than most. Ford had a plan at one time to become a 'virtual' manufacturer, outsourcing all production. That got shut down before anything became of it.

I think you also underestimate the challenges of a brand and network. Look at Lexus. How long has it taken Toyota to establish that brand, which in Europe, still isn't where I expect they'd like it to be.

Hintza

Thank you guys for a well reasoned debate which I found very interesting and informative. Not often we get that on here now days.

worried_jim

Those Chinese cars look very good GB. Great point about the heritage issues facing the old western car manufacturers.