GM's Regional Branding Decisions Come Unstuck with the Chevrolet Volt—Interview

Complicated Times

The good news for General Motors (GM) is that it is still on track to launch the first iterations of the Chevrolet Volt, which carries its revolutionary extended range plug-in electric vehicle technology in 2010. If—or when—achieved, this will be a real coup for the company, with the car designed, developed and tested in record time. The bad news is that its launch is throwing up a number of challenges in terms of how it should be branded.

"We have highlighted that Chevrolet will take the lead with E-Flex, and the Chevrolet brand is now present in Europe as well," Mike Arcamone, vice president of GM Powertrain Europe told Global Insight at a Powertrain event in Turin, Italy last month. "But the Opel brand will have the same technology."

He continued: "I would say that in terms of the vehicle launch cadence, the products from Chevrolet will probably be second. Opel will come first and then followed quickly by Chevrolet. And we're also differentiating the brands a little bit, placing Opel a bit higher and Chevrolet as a more value-oriented brand."

These statements speak volumes. Firstly, GM had implied with the showing of the GM Flextreme concept car that the first versions of the E-Flex technology to be sold in Europe would come under the Opel and Vauxhall brand names. The Chevrolet Volt, which was first shown at the Detroit Auto Show in January 2007 was aimed, GM said, at the North American market with its downsized 1.0 litre gasoline (petrol)/flex-fuel engine. The GM Flextreme, on the other hand, with its 1.3-litre turbo diesel engine, was aimed squarely at Europe. The Flextreme also previewed some of the early design language of the next-generation Opel/Vauxhall Meriva multi-purpose vehicle (MPV).

In terms of GM's strategy of having already named Chevrolet as the leading global brand for E-Flex, it is understandable in one sense why GM would choose to sell the Volt under the Chevrolet brand name in Europe as well as in North America. This decision will raise further the brand's profile in Europe at a time when its sales in the region are increasing rapidly, albeit with the vast majority of the sales growth coming from Russia, where Chevrolet is now the number one foreign brand, as opposed to coming from Western Europe.

But what does not make so much sense is why GM's most sophisticated and expensive technology in years will be sold on a brand, that by GM's own admission, is being positioned as a value-oriented brand. In response to this point, Arcamone argues: "It's not going to be the most expensive technology. We introduced this technology and developed it, researched it and there is cost. But then if you spread the technology over a larger volume, then it gets very affordable to the customer."

Another flaw in GM's plan is the fact that Opel had already been named as GM Europe's chosen brand on which to debut new technology. It seems to be for this reason—along with the fact that GM is trying to move Opel and Vauxhall slightly more upmarket—that these two brands are being allowed to debut E-Flex, albeit by a matter of months.

Outlook and Implications

This is an interesting example of how GM's strategy has become unstuck amid the myriad of brands it markets on either side of the Atlantic Ocean. Because of the number of nameplates that the Detroit vehicle manufacturer juggles, the Volt was always going to be a politically charged car. Regarded by many as the most revolutionary product ever to have come out of GM, whichever brands were chosen to debut E-Flex will receive a massive boost to their profile.

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