This week’s resignation of Chevrolet’s global marketing boss, following the resignation of the brand’s European head, is an interesting step. As one of the team who launched Daewoo in the UK, I was sad to see Chevrolet pulled from the region recently by its parent General Motors, which incorporated Daewoo into the Chevrolet brand after acquiring the Korean company in 2001.
After all, Daewoo had had a great start in the UK, Europe’s second most important market. The product was several model cycles past its use-by date but a no-dealer, customer-first strategy provided real brand values and record market share for a new entrant – immediately placing it ahead of Hyundai, Mazda and Volvo – and inspired success in Europe.
The rationale for dropping Chevrolet in Europe? It was losing too much money. It was seen as having too much overlap with the Opel and Vauxhall sister brands. Volumes were too low. True, but these were largely the results; the cause was a failure to develop the right product and build a brand for Europe.
While Daewoo had become synonymous with quality customer service, Chevrolet was known more for being American. The big, brash, chrome-lined Americana image didn’t fit with compact, Korean-made value products, and the fact that these sat in the same line-up as Corvettes and Camaros with old-world V8s presented a chasm for consumers to cross.
Some have suggested that a value brand simply wasn’t right for the company, which has wanted to take the the Opel and Vauxhall products upmarket to fight the tidal wave of new models from the German premium brands. But VW Group has done just fine with Skoda book-ending a brand portfolio with Bugatti, Bentley and Lamborghini. The truth is that GM didn’t develop distinctive product and failed to present a coherent brand.
It’s ironic that Daewoo, which had come to Europe as an independent in the mid-1990s, taken on the establishment and leap-frogged its Asian value counterparts has – under the ownership of an automotive giant with three-quarters of a century’s experience of operating in Europe and with an established brand name – sold just one vehicle for every five clocked up by Hyundai and Kia.
But the ultimate irony is that, having developed a modern, lean and fit-for-purpose approach as Daewoo, Chevrolet has been driven to virtual extinction in Europe while a bankrupt GM Europe has emerged from global recession and Eurozone collapse with great-looking product.
Dropping Chevrolet in Europe may be the best decision for GM financially, and perhaps inevitable in a European market which has shrunk so alarmingly. But with all the places at the premium table taken and no value offering, the lack of strategic investment in the Chevrolet brand will surely prove to be a cause of regret.
Things are different today from when GM acquired Daewoo – excellent product is now a given. But that simply means that the brand is even more important, because it’s the differentiator, the I-want-one factor – something GM will be up against when it aims Opel and Vauxhall at those beautifully honed brands at BMW, Audi and Mercedes.
3 thoughts on “Chevrolet – that’ll be the Daewoo…that I die”
Mark I share some of your sentiments about Daewoo, having been there launching it with you and the team but I sense some “rose tinted” glasses. The Daewoos were pretty ropey machines, the financials of the UK strategy were unsustainable and the Korean management at the time, pretty clueless. The UK team did an amazing, ground-breaking job and it showed in market share and JD Power results but was it sustainable? Maybe. GM on the other hand have no clue how to manage their brands in Europe, one failure after another. Chevvy if it stands for anything it certainly doesn’t stand for made over Korean hatchbacks. Woeful, misdirected effort as you conclude. Nice blog, congrats on your site.
Many thanks for your comments Neil, and good to hear from you – amazing how much response this piece has generated across different channels. No rosiness on my part though – we all know Daewoo’s failings. But what GM acquired provided a leg-up at an important time for growing a budget brand, even if the UK template couldn’t simply be transplanted into an existing framework. And a Hyundai-style name plate would have allowed them to slide Opel Vauxhall upmarket. At least Saab is refusing to die!
Hi Mark. I found this belatedly, but as I take almost the opposite view (and I know you enjoy disagreeing with me) so here’s what I said at the time.