Why GM Is Pushing Chevrolet in Russia
Though General Motors (NYSE:GM) will soon make Chevrolet a thing of the past in Europe, the automaker is committed to advancing the Chevy brand in Russia and other former Soviet countries, Ward’s Auto reports. The approach will involve more marketing and increased production volumes in a market where General Motors is also looking to expand the market share of its overseas Opel brand.
GM has been trying to determine an overarching strategy for Russia and Europe with respect to the Chevrolet and Opel brands. The automaker has the daunting task of trying to increase awareness and sales of the Chevy brand without neutralizing momentum for Opel. This effort led General Motors to its decision to slowly end Chevrolet operations in Europe by 2015 in order to keep its focus on reviving Opel.
In Russia, the approach is even more complicated. Ward’s Auto reports that GM will start importing stars of the Chevy brand — including the 2014 Corvette Stingray — to the markets of Russia and its neighbors that comprise the Commonwealth of Independent States while it ramps up production of other Chevy models in area plants. Meanwhile, GM sees its young clientele for Opel in Russia as the key to advancing the brand’s hold on the regional market.
Karl-Thomas Neumann, the head of Opel and GM in Europe, sees outstanding potential for Opel to increase market share in Russia and neighboring countries in the average age of consumers. Whereas Opel consumers in Europe are closer to 50, those in Russia are younger than 40, Ward’s Auto reports. General Motors hopes to turn its 3 percent market share into twice that among Russian consumers.
Achieving that goal won’t be easy, with popular Chevy models potentially cannibalizing Opel sales in the region. Smaller cars such as the Chevy Cruze, GM’s top global performer, make up a lineup that has the tendency to feel budget-oriented when compared to Opel. That is, until upscale Chevy vehicles such as the Corvette Stingray start showing Russian consumers the other side of the brand.
Ward’s Auto reports GM will have Corvettes on sale in Russia by this spring, which should help consumers differentiate between Chevrolet and Opel. The lack of coherence between the two brands may be what’s holding GM back from its effort to regain the title of top world automaker. By contrast Ford’s (NYSE:F) global strategy has paid off handsomely, pushing the automaker to release even the new Mustang as a global car.
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