Chevrolet's European Market Relaunch Strategy: 2005

Company History and European Expansion

In 1907, Louis Chevrolet began driving for Buick, where he met Billy Durant, the future founder of General Motors. Chevrolet was officially established in 1911 by Louis Chevrolet and Billy Durant. Louis Chevrolet had already built a strong reputation as a mechanic and race driver, both in his native Europe and in the United States.

General Motors began building Chevrolet brand cars in Denmark in 1923 and Belgium in 1925, then acquired Vauxhall Motors Ltd. in England (1925) and Opel AG in Germany (1925). In Europe, Chevrolet also operated production facilities in Poland and Switzerland until 1968. During the latter half of the twentieth century, Chevrolet established itself as a niche European brand, importing flagship models such as the Corvette and Camaro alongside other Chevrolet vehicles.

In October 2002, GM Daewoo Auto & Technology Company (GM DAT) was formed through the acquisition of Daewoo Motor Company's research, design, engineering, and manufacturing facilities in South Korea and Vietnam. GM Daewoo Europe was then established to coordinate sales subsidiaries and marketing across Europe. In 2003, GM operated eleven production and assembly facilities across eight European countries, employing approximately 63,000 people. At the 2004 Paris Motor Show, Chevrolet announced its relaunch across Europe, with headquarters established in Zurich—the capital of founder Louis Chevrolet's home country of Switzerland.

European Automotive Market Overview

Europe is the largest passenger car producer in the world. In 2003, approximately 41 percent of the 42 million passenger cars produced worldwide were manufactured in Europe. The European automotive market is highly competitive, with approximately 20 automakers offering more than 50 brands across over 200 models.

The most prominent automakers in Europe are the Volkswagen group, the Peugeot group, Renault, Ford, General Motors (Opel/Vauxhall/Saab), Fiat Group, DaimlerChrysler, and BMW. The European passenger car market is typically segmented by vehicle size and body type:

Europe represents the second-largest global regional market for General Motors Corporation after North America. GM Europe reported net sales and revenues of $27.5 billion in 2003, compared to $23.9 billion in 2002. Project Midas was assembled in early 2004 to introduce the Chevrolet brand of passenger cars into Europe in 2005.

General Motors' Strategic Position in Europe

The Project Midas workgroup established three core objectives for Chevrolet's positioning statement:

The core strategic challenge was to determine how Chevrolet could increase its European market share from 0.85 percent to 1 percent while managing the rebranding transition from its existing Daewoo product line.

Market Segmentation and Customer Profile

The European passenger car market is traditionally segmented on the basis of car owner social status and value orientation across national boundaries. Market research identified three major psychographic segments:

Mainstream Segments (35 percent):

Traditional Segments (46 percent):

Postmodern/Materialistic Segments (19 percent):

GM's cross-national research identified "expressive value" as the central perception of the Chevrolet brand across markets. This manifested in customer preferences for peace of mind, robust and reliable cars, practical vehicles without excessive features, strong urban performance, attractive styling, and friendly dealership personnel.

Competitive Analysis and SWOT Assessment

The target customer profile includes down-to-earth, unpretentious individuals with traditional values, broad age range (often middle-aged or older), married status, modest formal education, and blue-collar or working-class occupation. These customers devote free time primarily to family and home improvement, show no excessive consumer aspirations, and avoid prestige-driven purchasing.

Chevrolet's primary competitors in Europe include Ford, Fiat, Peugeot, Renault, and Volkswagen. A comprehensive SWOT analysis identified the following factors:

Strengths:

Weaknesses:

Opportunities:

Threats:

Four alternative strategies were evaluated: (1) price reduction to gain attention and increase sales; (2) market transition emphasizing the shift from Daewoo to Chevrolet; (3) a "clean slate" approach presenting an entirely new brand image; and (4) maintaining the Daewoo name while subtly promoting Chevrolet as a global brand.