General Motors (Chevrolet India)- Marketing Decisions
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Why GM failed in India? What were the marketing decisions taken by them and what could have done better by Chevrolet India marketing team in India?
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General Motors (Chevrolet India)- Marketing Decisions
- 1. GENERAL MOTORS (CHEVROLET INDIA) PROJECT: INTERNATIONAL MARKETING DECISIONS PRESENTED BY GROUP 7, TERM-01 MRIGANK SINGHAL (17PGPIM18) MANISH SINGH (17PGPIM17) OM PAWAR (17PGPIM20) RACHIT GOEL (17PGPIM22) VANSH MUDGIL (17PGPIM33) SUNNY SAGAR DHAMIJA (17PGPIM31)
- 2. Table of contents General motors – An introduction Chapter 11 bankruptcy AFTER BANKCRUPCY ADVERTISEMENT FAILURE GM IN INDIA VIA CHEVROLET GM IN INDIA VIA CHEVROLET MARKETING PERSPECTIVE WHY IT HAPPENED PESTLE ANALYSIS CONCLUSION RECOMMENDATION Bibliography
- 3. GENERAL MOTORS: General Motors Corporation was formed on September 16, 1908, in Flint, Michigan, as a holding company controlled by William C. Durant, owner of Buick. General Motors produces vehicles in 37 countries under twelve brands: Chevrolet, Buick, GMC, Cadillac, Holden, HSV, Wuling, Baojun, Jie Fang, and Ravon. In addition to its twelve brands, General Motors also holds a 20% stake in IMM, and a 77% stake in GM Korea. It also has many joint-ventures, including Shanghai GM, SAIC-GM-Wuling and FAW-GM in China, GM-AvtoVAZ in Russia, Ghandhara Industries in Pakistan, GM Uzbekistan, General Motors India, General Motors Egypt, and Isuzu Truck South Africa. General Motors employs 212,000 people and does business in more than 140 countries. General Motors is divided into five business segments: GM North America (GMNA), Opel Group, GM International Operations (GMIO), GM South America (GMSA), and GM Financial. General Motors led global vehicle sales for 77 consecutive years from 1931 through 2007, longer than any other automaker, and in 2012 was among the world's largest automakers by vehicle unit sales. In India, they launched cars under Daewoo and Chevrolet. Daewoo Matiz couldn’t get the right traction and hence was discontinued. It didn’t have right after sales support and clear marketing strategy. Chevrolet on the other hand came up with different cars in different segments like Beats and Cruze, but again neglected the above two important factors for sales. Chapter 11 bankruptcy On June 1, 2009, after heavy losses, General Motors went bankrupt. Stockholders lost essentially all their investment. The 2nd generation Buick LaCrosse has been cited as an example of a GM's revival following its restructuring in the aftermath of the Great Recession. On July 10, 2009, General Motors emerged from government backed Chapter 11 reorganization after an initial filing on June 8, 2009. Through the Troubled Asset Relief Program, the US Treasury invested $49.5 billion in General Motors and recovered $39 billion when it sold its shares on December 9, 2013 resulting in a loss of $10.3 billion. The Treasury invested an additional $17.2 billion into GM's former financing company, GMAC (now Ally). The shares in Ally were sold on December 18, 2014 for $19.6 billion netting $2.4 billion. A study by the Center for Automotive Research found that the GM bailout saved 1.2 million jobs and preserved $34.9 billion in tax revenue. Also in 2009 as part General Motors Chapter 11 Bankruptcy, the company shed several brands, closing Saturn, Pontiac, and Hummer, while selling Saab Automobile to Dutch automaker Spyker, and emerged from a government-backed Chapter 11 reorganization. In 2010, the reorganized GM made an initial public offering that was one of the world's top five largest IPOs to date and returned to profitability later that year.
- 5. AFTER BANKCRUPCY ADVERTISEMENT FAILURE: • AD-CAMPAIGN “RE-INVENTION”: The ad campaign couldn’t create the impact GM wished tocreate. The euphoria was short lived and so was the campaign LINK: https://www.youtube.com/watch?v=nfhB5KHisaI • AD-CAMPAIGN “FASHIONISTA”: The ad-about-an-ad was so bad that it left everyone associated with it, including the ad agencies, seemingly running for cover • MAY THE BEST CAR WIN CAMPAGN: The current multimillion-dollar campaigns created for Chevy, Cadillac, Buick, and GMC by McCann Erickson, Detroit, feature the GM 60-day guarantee, and the premise "May the best car win." GM ran nearly identical back-to-back magazine spreads for the Buick LaCrosse, Chevy Malibu and Cadillac CTS Sport Wagon in which the ads are mirror images of one another, simply with a different car These advertisements couldn’t create the Hussle in marketing domain of GM and failed to create any impact on the people. The cost of each campaign was in millions of dollars, all went in vain. GM IN INDIA VIA CHEVROLET (DOMINANT PLAYER OUT OF OTHERS): • BEAT: Chevrolet Beats is the most celebrated car of Chevrolet in India and that’s why Chevrolet loves investing money in ad campaign for this compact hatchback. They came up with campaigns like “CHOOSE YOUR VERSION”, “TURN ON STYLE, TURN ON BEAT”, “BOTH SENSIBLE AND FUN” • CRUZE: This car is one of the best and and sturdy car developed by Chevrolet under GM. This sedan is powerful and huge and needed a good ad campaign and hence Chevrolet came up with “MOVES THE MONSTER”, “FOR THOSE WHO DO THEIR OWN THINKING” and appreciated the millennials of India • ENJOY AND SAIL: These two cars couldn’t create much impact on Indian population. Enjoy is a classic family car and Sail is a hybrid of sedan and hatchback. The campaigns “DOMINOES”, “ALWAYS ROOM FOR HAPPINESS” and “NEW CAR DAY” couldn’t create space in Indians’ heart and hence failed Chevrolet didn’t learn the lessons from its past and continued making same mistake of launching ad campaigns which didn’t resonate with India values, customs and thinking except few advertisements, this showed in their Beat and Cruze sales.
- 6. THE STORY OF GM SO FAR IN INDIA: GM pulls out of India operations of selling but will keep the export facility on as India serves as a strategic location for exports to other parts of the world. This announcement is consistent with GM’s global disciplined allocation of capital and investment in its business around the world designed to generate stronger returns and drive shareholder value. MARKETING PERSPECTIVE WHY IT HAPPENED: GM’s troubles are by no means unique. India is among the world’s fastest growing auto markets, but also notoriously difficult to crack. According to figures from the Society of Indian Automobile Manufacturers SIAM for April 2017, Maruti Suzuki dominates with a 51.9% share followed by Hyundai at 16.12%. Some of the world’s most storied brands have run out gas, had to take long pit-stops and either returned like Fiat and Renault or never bothered returning, like Peugeot. GM is just the latest addition. • It launched the wrong cars at the wrong time: GM’s first salvo was Opel, launched in 1996.Vectra was very sophisticated, fully computerized but ahead of its time, keeping in view bumpy, potholed Indian roads. And this was true of all three Opel brands: great products, wrong timing. Right timing would continue to elude GM. As Indian consumers got more demanding GM’s lack of investment in technology led to an aging portfolio. • It couldn’t keep up with the Indian consumer: The auto consumer in India is a paradox: at once, extremely value conscious and very demanding. They want more for less, if not for free! But at the same time, they are willing to pay for
- 7. something truly life changing. Probably GM tried to bring global solutions here. But the market is so big, it needs and deserves solutions tailored for it in terms of product, service and the way you connect with dealers. • Indian cars sell by word of mouth: Indian auto purchases tend to be consensus driven. Even before a car has been bought, discussions abound over its potential resale value. The middle-class population is risk averse. Much more than what an ad says, what your neighbor drives and your uncle recommends, has an impact. CHEVROLET ENJOY CHEVROLET CRUZE DAEWOO MATIZ OPEL ASTRA (HATCHBACK)
- 8. PESTLE ANALYSIS OF GENERAL MOTORS: • POLITICAL: Government rules and regulations have huge impact on automotive firms as GM because they must oblige by safety rules. Also, the custom duties, quotas, embargo and trade regulations affect the marketing of GM vehicles and parts from one country to another. Moreover, if government buys shares, it must comply with the policies of the government. In addition to that taxation rules, also affected the garment industry. • ECONOMICS:GM gets affected by the fuel price fluctuation and relative demand of the customers as they look for more economical solutions. Automotive firms like GM must conduct research on a middle option, for high-end cars, like hybrid manufacturing etc. The prices of steel also fluctuate which impacts the manufacturing of General Motors. Import and export also has affected the economic growth of general motors. • SOCIAL: General Motors understands the social need of customers and provides them with high-end vehicles according to their preferences, keeping in mind the social status of people. GM has always contributed in providing people what they need. • TECHNOLOGICAL: As technology, has advanced in today’s world so has the manufacturing style of GM via robots. GM contributes in providing advanced vehicles, using latest design, manufacturing and technology. Another impact of technology on GM is the connection between the customers and GM through social media and other websites. One can directly contact General Motors, for query and feedback. Communication has eased between GM and the target audience. • LEGAL: Business must operate under certain laws set in the market and violating them would result in penalty as well as bad image for the firm. GM abides to safety laws, custom laws etc. along with ‘Automobile Recycling Law’ set in the industry. GM is never seen under any legally activity or issues, because it follows every rule and regulation. • ENVIRONMENT: As every other automotive organization, GM also must abide by the environmental laws. Since 1994, GM has been working successfully on reducing the emissions of the factory. It has abided to the ‘environmental pledge’ of “CERES Principles” which includes a code of 10 points about business environmental guide.
- 9. CONCLUSION GM understands the requirement of the customers and provides them with appropriate, high-end vehicles to improve their social status. It is also contributing to the economies of the operating countries. According to time, it has evolved and advanced towards innovation and comfort for the customers. CHEVROLET DEPLETING NUMBERS: 2009-10 would have been the time Chevrolet was on full throttle. Strong Marketing Campaigns, New Product launches, Better market reach, Stability after riding on Uncle Sam’s shoulder and what not. The Indian market seemed of great value to every car manufacturer. GM is focusing on emerging markets and pumping more than ever on Indian operations.
- 10. At a time when majority of car makers are busy on focusing on customer centric dealership (Upmarket Dealerships, Lounge area, Children play area, Cafe, WiFi, Tablets with Sales person, Valet services, etc.). Chevrolet isn’t even bothered about poor consumer experience at showrooms and building trust in customer. Learn from other foreign car makers, design and develop product range for India. Suzuki does it for all their models, Hyundai does it for more than half of their line-up, Honda did it with City more than a decade ago and brought their diesel heart for Indian demands in all their cars after tasting the hard waters, Ford did that with Figo, the EcoSports and now the Aspire series. WHAT WE RECOMMEND: • RE-ENTER INDIAN MARKET WITH NEW PRODUCT: It took Maruti and Hyundai less than 2 years to get the Duster competitor ready. Chevy should find relevant products for the masses. What a good time this is to launch the all new Beat (or the new Spark).If Chevy really wants to sustain in this competitive zone, it needs to bring the best products timely. • IMPROVE THE DEALERSHIP EXPERIENCE: With close to 250 dealers. It’s matter of time before new products are launched. Just the dealership experience must be taken a level up. Why not launch Impala, Corvette or the Camaro to enhance the brand pull and make shoppers at showroom busy with selfie or other marketing campaign • CATER TO INDIA: Start working on Indian systems, as the market is dynamic and ever changing. Many players have failed so Chevrolet must be correct this time, understanding the demographics and psyche of Indian consumers. • DON’T LET THE SALES FALL: Play with multiple engine options, add touch screens infotainments, body-kits, change interior theme, new alloy wheel designs, ABS/Airbags on lower variants, addition of sunroof and other stuff to maintain the sales momentum. Look what VW did to Polo by creating so many iterations out of it. Beat has been their best seller for a long time. You don’t need permissions from US for small changes to the feature or specification modifications.
- 11. BIBILIOGRAPHY • http://timesofindia.indiatimes.com/business/india-business/Top-3-auto- companies-hold-70-market-share/articleshow/50749746.cms • https://www.gm.com/ • http://www.chevrolet.co.in/ • http://fortune.com/2017/05/18/gm-india-withdrawal/ • https://hbr.org/2017/06/what-u-s-ceos-can-learn-from-gms-india-failure • http://www.financialexpress.com/auto/car-news/general-motors-is-the-only-one- to-be-blamed-for-their-downfall-in-india-and-heres-why/674686/ • http://overdrive.in/news-cars-auto/opinions/what-went-wrong-with-general- motors-in-india/ • http://www.firstpost.com/business/general-motors-stops-selling-cars-in-india- heres-what-went-wrong-for-the-auto-major-3458690.html • http://www.youtube.com/