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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 ……….

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central eastern europe developments

Central & Eastern Europe Developments

Automotive News Global Conference - Detroit Jan ’08 Chris Lacey – General Motors

today
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
GM’s “Central & Eastern Europe”
  • 29countries
    • 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) Per Capita (USD)

Russia 986 940 Slovenia 22 079

Moldova 3 266 Uzbekistan 753

  • Complex legislative environment
  • Less than 20 years ago private vehicle retailing illegal –now one of the fastest growing vehicle markets in the world !
how are they developing
How are they developing ?

Automotive Industry Market – C&E Region

25,10% of Europe

8,70% Global

Annual Growth 20%

13,30% of Europe

4,60% of Global

gm s go to market approach
GM’S “Go-to-market approach”
  • Our 5 P’s
    • The right Partnerswithin GM to provide productsfor the range of price points required
    • The right Partners in market place for manufacturing
    • The right Partnersfor 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
The right Partners within GM for Product :
  • European Opel & SAAB
  • North American Cadillac / Hummer / Chevrolet SUVs
  • Asian [GM DAT] Chevrolet cars and SUVs
  • Russian [GM AvtoVaz] Chevrolet Niva

Real evidence of GM’s Globalisation and “One Company” approach.

the right partners for manufacturing
The right Partnersfor 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
the right partners for component supply
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
the right partners for distribution repair
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
the right partner philosophy with our customers
The right Partner philosophy with our customers.
  • Changing the “old image” of the pre ’90’sindustry & treatingcustomers 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 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

Learnings & Observations

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

Self Assessment / Learnings & Observations
operational difficulties and legislation
Operational Difficulties and Legislation

We try hard not be lost in the complex maze…

2001 through 2007 a success story
2001 through 2007 – A Success Story

GM Volume & Share Development – Central & Eastern Europe

*Excludes 180K GM Daewoo Kits sold in the region in 2007

and finally
……………..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 finally28
……………..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.

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