Can General Motors Company (NYSE:GM) Make A Comeback With Renewed Brand Strategy?
General Motors Company (NYSE:GM) strengthens its European brand strategy to push its presence amidst uncertain economic environment. While U.S. automotive sales have been encouraging for leading automakers including Ford Motor Company (NYSE:F) and General Motors Company, Europe is posing bit of challenge for these car makers.
GM’s European Strategy
General Motors Company (NYSE:GM) today announced its plans to reinforce its European brands in the mainstream and premium segments. Under the new strategy, General Motors Company will diminish the use of the Chevrolet brand in Europe by the end of 2015 to reduce the market complexity associated with having Opel and Chevrolet brands in the key European markets. Opel and Vauxhall will be the company’s leading brands starting 2016 to compete in European markets.
General Motors Company (NYSE:GM) attributed the challenging business model and difficult economic situation in the region to be primary drivers behind its decision to drop Chevrolet brand in Western and Eastern Europe. However the automaker will tailor the “Chevrolet” image to offer select iconic vehicles in Western and Eastern Europe and will also continue its presence in Russia as well as the Commonwealth of Independent States.
General Motors Company (NYSE:GM)’s Chairman and Chief Executive Officer, Dan Akerson said, “Europe is a key region for GM that will benefit from a stronger Opel and Vauxhall and further emphasis on Cadillac. For Chevrolet, it will allow us to focus our investments where the opportunity for growth is greatest.”
The Asian Concern
Industry researcher IHS Automotive, a division of IHS Inc. (NYSE:IHS), reported that General Motors Company (NYSE:GM) could cut the car production at its South Korean facility by almost 20 percent in 2015. These counts to annual production of about 650,000 vehicles in 2015 compared to around 800,000 vehicles during the current year.
The U.S. automaker is concerned over the increased tension with North Korea as well as labor relations and wage costs scenario in South Korea, which is likely compelling General Motors Company to shift its operations to alternative locations.