Friday, December 6, 2013

GM Still Can't Manage Its Brands

We first wrote about Opel in 2009, when it was slated to be sold to parts behemoth Magna International. Opel's platforms, called Delta and Epsilon, found their way into some nice looking and riding cars in the U.S., including those badged as Saturns and Buicks, including the LaCrosse.

Then, after its successful IPO, the company decided to make the Chevrolet brand the American face of GM in Europe.  Huh?  Here in the U.S., it's an iconic brand which has made a nice recovery from a near death experience in the seventies and eighties when it put out unacceptably inferior cars. In Europe the brand would be met with a shrug of the shoulders.  Again, with irony, the Chevy Cruze platform here in the U.S. was an Opel platform.  Not a bad car either.

But, the financial management folks at GM have decided to pull the plug on the Chevy brand in Europe after its 1.6% market share post- introduction.  Of course, it's the only decision to make, because establishing the brand in the crowded and finicky European market would take too long and cost too many dollars.

Meanwhile, the Cruze and other Chevy platforms in the U.S. will now move to cheaper platforms from Daewoo in South Korea, except that rising wages there are complicating the pricing. Are you keeping this all straight?

What about the customers?  Won't they notice the difference between something produced by Opel technology and something from Daewoo?  What about the dealers?  Some in Germany, committed themselves to exclusively selling Chevrolets, in order to differentiate themselves from other dealers selling Opels.

This is another company that still can't get out of its own way.  The IPO may have gone well, and the balance sheet may be stronger, but the company still can't manage its dealers, brands or customers.  They all deserve better.

No comments: