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Chevrolet ‘will be a winner’ in UK

BMW or Chevrolet – which would you choose? According to GM Daewoo dealer development manager David Moran, that’s not as daft a question as it first seems.

Chevrolet, which is launched in January out of the ashes of Daewoo (retained as the name of the manufacturing operation), is firmly positioned at the value end of the General Motors brand line up – but that won’t stop it competing against premium manufacturers, particularly when the S3X sports utility vehicle comes in 2006.

“Chevrolet is a value brand but we can still hit a premium market. Why shouldn’t a BMW customer consider a Chevrolet product, for example the S3X instead of the X5?” Moran asks.

“Our customer profile is intelligent, smart buyers who want value and are not brand conscious – but they are not short of money. Their first car is often a company car and the Daewoo is their second car. The purchase is driven by relationships – they don’t haggle, they are interested in the service – instead of transactions.”

Moran’s in-tray is bulging with enquiries from retailers, including the big plcs, following the decision to rebrand. Seven appointments are imminent, taking the network to 90 by year-end, although existing GM retailers – Vauxhall and Saab – get first choice to fill the other 17 open points. Target areas include Aberdeen, Oxford, Cambridge, Peterborough and Reading.

Dual-franchising is a clear opportunity: 40% of the network is dual-branded with either Vauxhall or Saab, 30% with another franchise, and the rest solus. As a result franchise standards remain largely unchanged.

“We could have used the name change to increase our standards, but we see no reason to do that,” says Moran. “Our standards are fair and reasonable and will remain so.”

New corporate ID is being introduced in stages. In December dealers will attach temporary vinyls of the Chevrolet name and logo to their windows and remove the Daewoo oval from the fascia.

The totem will remain with the addition of a servicing sign for Daewoo aftersales customers.

Permanent signage will be introduced in summer 2005, including new totems and tinted blue glass frontage.

The cost, on average £12k per dealer, will be part-funded by Chevrolet, which is spending £50-£60m on the programme across Europe. In return, dealers enjoy a premium-busting 12% margin before bonuses (volume bonuses were introduced this summer), while the carmaker has recently revised its servicing rates from a fixed £20 to a variable rate depending on local market conditions.

“It’s a retail rate and worth £50,000 to the bottom line of the average dealer,” says Moran. “Our retailers make a lot of money – this is a profitable franchise.”

GM rebranded partly because it did not own the Daewoo name, partly to have a consistent brand throughout the world (the Chevrolet badge is already used in emerging markets).

Dealers can expect new products and diesel engines thanks to a $1.5bn investment in a new plant. “Access to the GM portfolio means we can grow our product range faster,” says Moran. “We will also assess which Chevrolet models we can take – there are lots that appeal.”

GM Daewoo managing director Andy Carroll (Chevrolet MD designate) says sales, which this year will exceed 20,000 thanks to a ‘two-for-one’ deal (buy a Daewoo now, get a Chevrolet in six months’ time), will hit 25,000 in 2005, with average throughput per dealer around 250 units.

By 2007, when the full range is available (see panel), he expects to be back at pre-2002 levels (35,000), although with the benefit of the Chevrolet brand, backed with press ads, direct mail and, eventually, a TV campaign, this could be as high as 45,000.

“We will re-establish confidence in the product, in us and in our retailers,” says Carroll. “Chevrolet will be a winner in the UK.”



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