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Then & Now: 100 Years of Chevrolet

Montag, 24. Oktober 2011

Chevy turned 100.
Reason enough to come out with a nostalgic tribute to the history of Chevrolet which accompanied the lives of so many Americans in the last century. Through good times and bad times just like the brand itself had its ups and downs. Or to say it in the words of a 1991 Chevrolet “Heartbeat of America” TVC, “the best things have always been those that last”.
For more than 100 years Chevorlet has made use of patriotic and nostalgic imagery to connect with the customers and to persuade them to only buy a true American brand as is Chevrolet (more or less as we all know). But after 100 years one can say this really pulls or as this recent commercials says, “Chevy runs deep.”

Oh one thing to add: As this current campaign proves, “Chevy” is still being used in communications, other than rumor had it in 2010. –> Link

Chevrolet to Bury "Chevy" in Corporate Communications

Samstag, 12. Juni 2010

On June 10, I came across several articles dealing with an internal GM memo which apparently prohibited its staff to use the name “Chevy” when speaking of Chevrolet models or the brand in general. “Why this?” you may wonder. Isn’t this term common all over the U.S or even the world and doesn’t this express that to many people Chevrolet is more than a brand, something that has been part of American lives for centuries and that people have strong affection for? Damn right! And what is the corporate benefit of only using Chevrolet instead of Chevy? Should Coca-Cola avoid the use of Coke? Surely GM’s marketing department has had its reason for this. I use this opportunity to provide you with some interesting facets of the history of the US automobile market and the central role of patriotism.Many American automakers make heavy use of patriotism in commercials. Why? Well, simply because it works and it helped sell cars for many centuries.

When in the late 70s Japanese makes with surprising product quality and price-quality-relation entered the U.S. market, pointing to U.S jobs and the economy helped push sales of U.S. automobiles. Using the country-of-origin effect to gain a competitive advantage towards foreign makes and playing the patriotic card is what I term “patriotic marketing.” Especially the U.S. is a country most popular for its loyalty towards its nation and its cultural heritage and thus patriotic marketing has seen great success throughout different industries. Wal-Mart, Ford, Chevrolet and Budweiser are just some examples. And patriotic marketing is not a recent phenomenon. It can be found in markets all over the world. In the the U.S. it has been applied already in the days of the early colonies in order to support the local economy and to push the independence from British goods and dominance.

The sad side: Patriotic marketing has the same effect on domestic economies as other trade barriers have. They hinder foreign goods from entering the market. If they had been produced more efficiently , the tariffs make them more expensive than they actually would be and thus less attractive to the US consumer. Unfortunately this did not give U.S. auto brands in the 80s the time and space to improve in terms of productivity and quality. Instead patriotic marketing just helped to distract consumers from the obviously lower quality compared to German or Japanese makes. By avoiding direct competition and by producing specifically to a patriotic US target group, US automakers lost touch of the Japanese and European competitors. This is the reason why in the past you could barely sell US automobiles outside of the US. As a result GM, Chrysler and Ford all have been struggling in the beginning of the 21st century.

Status Quo: Today Ford and GM have realized that future market share comes from quality and innovation and from producing globally competitive vehicles that are attractive to auto buyers all around the world. Ford today is known for a strong focus on Social Media. Why? To connect with young target groups and in order to rejuvenate the brand. In the US more and more small-sized cars enter the U.S. market and GM is among the leaders when it comes to Hybrid technology or battery-powered vehicles such as the promising Opel / GM Ampera. Also GM started to introduce successful European Opel models in the US (under the Saturn brand). And they did NOT sell Opel, which may be playing a central role for the future of the GM corporation.

Learning: Patriotism may work nicely in domestic markets but in a global economy values such as quality, innovation and fit-to-market is what matters. President Obamas decision against a major Buy American campaign to boost domestic economy may have cost a short-time boost, but in the long run and in a global context, this was certainly the right decision. The recent financial reports by Ford and GM show that they obviously have made the turn: They again make good money with better vehicles. And Toyota who has always been ahead in terms of quality and reliability now has the quality troubles…. If this GM memo has been a move away from the patriotic American background towards a more global positioning, I cannot tell. Future commercials may provide an insight. But I am sure that the future of GM can only lie in becoming a strong global brand such as Ford or VW. Only then you can selll enough vehicles, profit from economies of scale and invest in order to be able to equip your vehicles with the latest technology.

Today, we are experiencing exciting times in the global automobile industry. Never before have there been challenges such as gas prices, battery technology, etc that may fundamentally change the auto business.

But let’s get back to America’s love for Chevy and how important a role Chevy had been playing in the past. When writing my master’s thesis on “Patriotism and American Values in U.S. Advertising” I came across numerous examples of patriotic marketing applied in US TV commercials. And I must admit that some of them also have a strong impact on me. To many proud Americans, these commercials may feel like a confirmation in their beliefs, in the cultural values many Americans so proudly cherish. I have provided you with a selection of commercials that are filled with references to American cultural values such as “work ethic”, “freedom” “risk-taking” and “individual achievement”. And in almost all of them you come across “Chevy”. Enjoy these colorful, moving commercials. Some of you may find them pathetic or stereotypical. But just imagine how these images may move a patriotic American citizen and ease the complex purchasing process…

1994: “Like A Rock”

2007: Chevrolet Super Bowl Commercial “Ain’t We Got Love”

~2006: This Is Our Country (Chevy Silverado)

1991: Chevy Truck “The Heartbeat of America Campaign”

1992: Chevy Like a Rock

Ads like these show that Chevy is a positive synonym for Chevrolet, a brand that helped make America what it is today. A brand that brought mobility to generations of Americans.

Article dealing with the issue:
http://www.reuters.com/article/idUSN1024152620100610

GM to retain Opel – what a foul play!

Mittwoch, 04. November 2009

What long looked like a neverending story got an unexpected turn. GM tonight decided to keep Opel.
GM who first played the poor victim of economic downturn and a US auto market that got ever tougher and who addressed governments for financial aid in order to maintain thousands of jobs now showed its real face. Among the wide range of similar brands of inferior quality, Opel can truly be called the most promising of all GM brands. For months, the German government has been working hard to support Opel and to navigate the corporation towards what seemed to be the most promising of buyers: Magna together with Sberbank. This may not have been the ideal result but at least it saved Opel and thus German engineering from Chinese copy methods. Now what? Time will tell. By keeping Opel GM maintains access to European-standard automobile technology and the production lines for small vehicles which may become one of the fastest growing automobile segments in the U.S. – given that gas prices will not fall to levels before 2006.

How can GM all of a sudden afford to keep Opel? According to GM auto sales in October have risen by 4 per cent compared to the previous year which was mostly due to the core brands Chevrolet, Cadillac, GMC and Buick.

German politicians and managers alike are very displeased about the game GM has been playing for several months.

I seriously wonder if the brand Opel and the the German Chevrolet models will not be negatively affected by this strategy. There is a latent threat that the strong sympathy and support which Opel has been experiencing in the last months may turn by 180°. Opel could be perceived to be less German and more capitalistic and greedy, sokaing up German taxpayer money…

Curious about what is to come….

Update:
One day has gone since GM announced to keep Opel. As expected, German government representatives are “pissed”, European Opel employees scared about the future, and Magna angry about this sudden change of plan. Many wonder how GM plans to manage the restructuring of Opel, what will happen to the European factories and whether GM will make its statements true and lay off some 10,000 employees. Experts expect that GM will increase pressure on the current European factories and try to play them off against each other in the struggle for survival.

I am skeptical about whether GMs strategy has a long-term perspective. They are running risk of pissing off European consumers, auto unions and European governments. How then do you want to increase sales in Europe? And how will rival automakers react to this move? Ford is already ahead of competition in the U.S. and by introducing more and more European technology in the U.S. and by focusing on efficiency instead of pure power and size their head start may manifest.

GM's 60day campaign – revisited

Donnerstag, 15. Oktober 2009

The following article has been published by BusinessWeek Automotive Blog

GM’s 60-day guarantee seems to be working

Posted by: David Welch on October 14

General Motors encountered plenty of skepticism when the company launched a 60-day buy back guarantee on its new cars in September. Some critics said it wouldn’t get many shoppers to dealerships. One dealer told me that the program would only entice joy riders who want to take a Corvette for a month and bring it back, free of charge.

But so far, the program appears to be working. Vice Chairman Bob Lutz told reporters today that consideration is up 15%. That means that 15% more people are giving its cars a look. Edmunds.com, which tracks web traffic and vehicle consideration, confirmed Lutz’s figure saying it comes form the website’s own research.

And the joy riders? Lutz said that of the 150,000 vehicles sold at retail during the program, only a few hundred even opted to take the 60-day guarantee. And of those buyers, only one returned his car. It was a Corvette. But Lutz said the buyer decided he didn’t want the bother of a manual transmission. So he returned his ‘Vette for one with an automatic.

Source: http://www.businessweek.com/autos/autobeat/archives/2009/10/gms_60-day_guar.html

Opel goes to Magna and Sberbank

Sonntag, 13. September 2009

The uncertainty is over.
Although many feared that after endless meetings and discussion GM would not give away Opel but instead keep it to rebuild GM, it will finally go to Magna and its investors. Although this put an end to endless speculations, many workers at Opel now fear for their jobs. German Minister of Economics Affairs, zu Guttenberg, confirmed rumors that Magna will lay off more workers than initially expected. Latest news are speaking of up to 4,500 jobs that will be cut in Germany. Most of these will be in the area of production but also administrative job will fall away.
But Opel also has demands against former owner GM. Until recently GM decided in which countires Opel models are to be sold. It took long until Opel models could be sold in the US under its American brand Saturn. But still today, many Europeans are wondering why many of those attractive and efficient German Opel models never made their way into the American market. The reason seems obvious: cannibalisation. Why buy a Chevrolet when you can have the technologically superior European Opel models? Let’s hope Opel under Magna will have the possibility to enter more international markets that bear opportunities.

Opel to change its claim – once again…

Dienstag, 08. September 2009

Amidst all the confusion about the future of Opel, the marketing experts of Interbrand have been asked to develop a new claim for the shaken automaker Opel. According to today’s article on www.ftd.de, the new claim was inspired by the shirts Opel workers used to wear while protesting for a soon and satisfying concept for Opel. “We live cars” may see its official debut at the IAA in Frankfurt which will open its gates on September, 17. The new claim is expected to be accompanied by a remake of the Opel Blitz brand mark.

I argue that claims should show the same consistency as the brand as a whole. Too many quick and not well thought of changes weaken a brand’s perception in the eyes of the consumer. In the ideal long-run marketing strategy all is in line: The logo, the claim and the values a product represents. BMW for example has only slightly changed its logo over the years, and for centuries, driving pleasure has remained the central element of any BMW communication. The same consistency can be found in their cars: Whether a 635 CSI, a 2002, or the latest X1, sportiness and pleasure are still central facets of the BMW brand.

To me personally, Opel represents German automobile history. Not in the negative sense. There is still a lot of sympathy for this brand. And in recent times, this has been paired with fair value and decent quality. With the Opel Insignia and the new Astra, asthetic design also returned, and paved the way for a new generation of Opels. Given, there will we one.

As it looks now, GM has discovered that within its corporation Opel is a diamond in the rough that might also lay the foundation for a GM future. But I am convinced many people at Opel are tired of the ignorant and self-aggrandizing GM managers…

The dream: Let Opel take over GM and clean up this American mess of a carmaker.

Link to the cited ftd article:
http://www.ftd.de/unternehmen/industrie/:markenauftritt-opel-mit-neuem-spruch-und-neuem-blitz/50006452.html