Central & Eastern Europe Developments
Automotive News Global Conference - Detroit Jan ’08
Chris Lacey – General Motors
Today :
• Central & Eastern European Markets
− What are they
− How are they developing
− GM’s go-to-market strategy
− Conclusions
…..and finally ………
GM’s “Central & Eastern Europe”
• 29 countries
− East of Germany, North, West & East of both India & China!
− 12 time zones / 25 million sq. kilometers
− 475 million population [8% of the world, 54% of Europe]
− 84 million vehicles in car parc today [Average age = 12+ years]
− 30 languages, 4 religions
• GDP range (nominal 2006)
GDP Total (million USD)
Russia
986 940
Moldova
3 266
Per Capita (USD)
Slovenia
Uzbekistan
753
22 079
• Complex legislative environment
• Less than 20 years ago private vehicle retailing illegal –
now one of the fastest growing vehicle markets in the world !
To put the Region in perspective
Diverse demand and usage
How are they developing ?
Automotive Industry Market – C&E Region
7,000,000
25,10% of Europe
8,70% Global
6,000,000
Annual Growth
20%
5,000,000
4,000,000
13,30%
of Europe
4,60% of Global
3,000,000
2,000,000
1,000,000
0
2001
2002
2003
2004
CE
EE
2005
Russia
2006
2007 (0+12)
GM’S “Go-to-market approach”
• Our 5 P’s
− The right Partners within GM to provide products
for the range of price points required
− The right Partners in market place for
manufacturing
− The right Partners for component supply
− The right Partners in the market for vehicle
distribution and repair
− The right Partner philosophy with our customers
The right Partners within GM for Product :
• European
Opel & SAAB
• North American
Cadillac / Hummer /
Chevrolet SUVs
• Asian [GM DAT]
SUVs
Chevrolet cars and
• Russian [GM AvtoVaz] Chevrolet Niva
Real evidence of GM’s Globalisation
and “One Company” approach.
The right Partners within GM for Product:
The right Partners for manufacturing
• GM and GM DAT (formerly Daewoo) have a long history of
manufacturing in the C&E Region from early 90’s
• GM in late 90’s actually stopped vehicle manufacturing in 3 GM plants
in the region – Hungary, Poland (Warsaw), and Turkey
• Daewoo had 4 regional plants (licensed assemblers) all still operating
(in Ukraine, Poland (FSO), Uzbekistan, & Romania)
• 180,000 GM DAT vehicle kits assembled in these plants are not
recorded in GM Sales in the region
• Recent developments include the new GM plant in St Petersburg and
manufacturing licenses being granted to Zastava in Serbia, Azia Avto
in Kazakhstan, and FSO in Poland
• Currently GM vehicles are manufactured or assembled at 9 locations
in the region
GM Manufacturing Footprint in C&E Region
Non-GM SKD/CKD
Avtotor (Russia)
St. Petersburg Shusari
Non-GM SKD/CKD
FSO (Poland)
Gliwice (Poland)
JV CKD
GM Avtovaz (Russia)
Non-GM SKD
Azia Avto
(Kazakhstan)
Non-GM CKD/SKD
Zastava (Serbia)
Non-GM CKD/SKD
ZAZ (Ukraine)
Non-GM CKD/SKD
UZDW
(Uzbekistan)
The right Partners for component supply
• GM’s Global Purchasing and Supply Chain group aims
to increase component sourcing close to where we build
• They extend supply channels, identify local suppliers and
develop to GM standards for local and global
manufacturing
• Purchases in C&E region increased by 81% from 2003
to 2007, now 21.4% of total GME purchases
• 440 TIER 1 Suppliers in C&E region
• Resident Global Purchasing staff in C&E region
increased by 305%
• C&E region purchasing transactions 100% integrated in
GPSC processes
Innovative customers need to be served well !
The right Partners for Distribution & Repair
• GM network growth [contracts]
‘95 = 202
‘01= 402
‘07 = 765
• In depth blueprinting
• Best applicant selection:
Management focus / site location / funding / customer
service attitude
• Full multi-brand approach appropriate to location &
opportunity
• Facilities to full European standards from day 1
• Communication / motivation / training & guidance
800
800
700
700
600
600
500
500
400
400
300
300
200
200
100
100
0
No of sites
units per dealer
The right Partners for Distribution & Repair
0
1997
2001
2007
Average Throughout
No of sites
NPB
n.a.
2,75%
The right Partner philosophy with our
customers.
• Changing
the “old image” of the pre ’90’s industry &
treating customers with respect
− Transparent retail pricing [no premiums]
− Warranty & “Policy”
− Realistic labor / repair rates
− Satisfaction survey
− CRM activities
− Retail finance and leasing options
− Vehicle exchange or “buy back” policy
− Excellent parts warehousing and fast delivery
− Open communication /dialogue / CAC’s
− G2 used car programme
Self Assessment / Learnings &
Observations
Could we have done
Learnings & Observations
•
•
•
•
•
better?
Dealer in house systems
Full portfolio - only in 60%
of market covered
- Full CV range
- Low cost product < $8,000
Wholesale & Retail finance in
all markets
Faster manufacturing
capacity increases
More training & more training
•
•
•
•
•
No phones to mobiles
Cash to credit cards
Brand is King
High % Internet use
Mobile / clothes / travel / car
/ apartment / house
• Millionaires Show [Russia]
• Distribution partners’ positive
can do attitude and
investment policy
• Entrepreneurs everywhere
Operational
Difficulties and
Legislation
We try hard not be
lost in the complex
maze…
2001 through 2007 – A Success Story
GM Volume & Share Development – Central & Eastern Europe
522K*
10%
600,000
*Excludes 180K GM Daewoo Kits sold in the region in 2007
9.0%
9%
500,000
7.6%
8%
7.1%
7.2%
7%
400,000
5.7%
6%
4.4%
5%
300,000
4.0%
3.8%
4%
3%
200,000
100K
2%
100,000
1%
0%
0
2001
GM volume
2002
GM Mkt. Sh.
2003
Opel Mkt. Sh.
2004
2005
Chevrolet Mkt. Sh.
2006
2007*
……………..and finally
• Market Volumes :
- Russia
= 2,708,659
- Ukraine
=
584,823
- Turkey
=
625,843
- Poland
=
372,054
- China
=
8,190,436
- Brazil
=
2,220,481
- India
=
1,812,375
….and finally ….Emerging Markets ??
……………..and finally
Request:
Can all of the Global Automotive Industry stop calling
these markets & Brazil, China and many others:
“Emerging”
Fact:
They have “Emerged” and are our markets of
“Growth & Opportunity”
We forget / ignore/ mistreat them at our peril.
Central & Eastern Europe
Playing To Win
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