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GME Multi-Brand StrategyGME Multi-Brand Strategy
Jonathan Browning,Jonathan Browning,GME Vice President Sales, Marketing and AftersalesGME Vice President Sales, Marketing and AftersalesJonathan Browning,Jonathan Browning,GME Vice President Sales, Marketing and AftersalesGME Vice President Sales, Marketing and Aftersales
Multibrand-Event
Overall European Market ObservationsOverall European Market Observations• Moderate global economic expansion underway
heading into 2007
• Western European growth is near-trend levels
• Industry demand a record 21.7 million units in 2006
• Stable industry fundamentals for 2007
• Segment growth at low-end and premium
• Industry wide negative Net Price
• Regulatory/policy pressures continue to drive costs
Multibrand-Event
GM Europe TurnaroundGM Europe Turnaround
• GM Europe = 22% of GM’s global vehicle sales
• European turnaround program started in 2000
• Balanced between structural cost reduction andrevenue/contribution margin increase– Successful labor negotiations improved plant and workforce
flexibility– Headcount in Europe cut by 30% since 2000
(from 88,000 to 60,000 employees)– Product portfolio completely overhauled– Improved measured and perceived quality of vehicles – Focused on revenue and margin improvement
Multibrand-Event
1.7641.820
1.9561.983
2.002
1.500
1.700
1.900
2.100
2002 2003 2004 2005 2006
Increasing Sales in Total EuropeIncreasing Sales in Total Europe
GME RegistrationsGME Registrations11stst time time above above
2 million 2 million unitsunits
Un
its
(00
0)
Multibrand-Event
2006 Sales Results2006 Sales Results
• Record sales of +2 million vehicles
• Sales growth in Eastern Europe (+59%)
• Record sales volume for Saab (+10%) and Chevrolet (+16%)– Saab volume up in all major markets– Chevrolet Russia +67%
• Opel/Vauxhall – focus on profitable sales– Zafira/Meriva #1 in monocab segment – Astra #2 in compact segment
• Cadillac +22% vs. 2005• Aftersales net sales growth 6%
Multibrand-Event
GME Revenue and Aggregate ContributionMargin Development
GME Revenue and Aggregate ContributionMargin Development
100102
104
90
100
110
2004 2005 2006
Ind
ex:
20
04
= 1
00
%
RevenueRevenue
Total GME (O/V,SAAB, and P&A) excluding PT and Allied IPC.
Aggregate Contribution MarginAggregate Contribution Margin
Multibrand-Event
Contribution Margin and Structural CostContribution Margin and Structural Cost
1998 1999 2000 2001 2002 2003 2004 2005 2006
Structural Cost
Percentage of Net SalesPercentage of Net Sales
Contribution Margin
2000-2006 Structural Cost reduction = $2.0 B
Multibrand-Event
Benefits of Rebalancing Fleet MixBenefits of Rebalancing Fleet Mix
Index 2004 = 100Index 2004 = 100
100%
80%92%
0%
20%
40%
60%
80%
100%
120%
140%
Index Rental Volume
2004 2005 2006
100%
125%
153%
80%
130%
180%
Index Agg. Contribution Margin
2004 2005 2006
Multibrand-Event
Astra GTC – Contribution Margin Case StudyAstra GTC – Contribution Margin Case Study• Design excellence, bold pricing and communications
– GTC Average Transaction Price is €21,200; €1,850 above 5-dr;€4,800 above predecessor 3-dr
– Strong conquest from Audi A3 as well as Golf and Focus
– Increased market share from 0.33% in 2004 to 0.42% in 2006
– Increased volume from 68,129 cars in 2004 to 88,279 cars in 2006
Multibrand-Event
2011Projection
Pressure From Premium & Value MarketsPressure From Premium & Value Markets
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
14%
67%
19%
19%
58%
23%
Premium2.8 Million units CY05
Mainstream8.6 Million units in CY05
Value3.2 Million units in CY05
21%
54%
25%
Western Europe Passenger Cars by Sub-Segment
Multibrand-Event
50%
60%
70%
80%
90%
100%
'95 '00 '05 '10
Western E. (16.9Million units CY05)
Central E. (2.2 Million units CY05)
Eastern E. (1.9 Million units CY05)
Eastward Sales Shift – Pressure on MarginsEastward Sales Shift – Pressure on Margins
Total European Industry, Share of Sales by Sub-RegionTotal European Industry, Share of Sales by Sub-Region
88%
6%
6%
77%
12%
11%
C + E Europe:
+11% pts ’95-’12
Multibrand-Event
Aggressively Pursuing Growth Opportunities in Russian MarketAggressively Pursuing Growth Opportunities in Russian Market
66,386,2
132,6
200
9%
6,60%
5,20%
4,20%
50
100
150
200
250
300
2004 2005 2006 2007 f/c
0,00%
2,00%
4,00%
6,00%
8,00%
10,00%
Volume k units Share
Multibrand-Event
Pro
fita
ble
R
eta
ilers
Str
on
g
Bra
nd
s
Sale
s
Eff
ecti
ven
ess
Aft
erm
ark
et
Pen
etr
ati
on
Lean
O
rgan
izati
on
GME Sales, Marketing and Aftersales Strategic Priorities
GME Sales, Marketing and Aftersales Strategic Priorities
MaximizeAggregate Contribution MarginGrow
Volume & Mkt ShareImprove
Cont. Margin per Unit Revenue Growth Improve
Contribution Margin per unit
Multibrand-Event
GME’s Multi-Brand StrategyGME’s Multi-Brand Strategy
Upper
Middle
Lower
SIGMA 2004
Social Status& Affluence
Traditional Modern Postmodern
ValueOrientatio
ns
Multibrand-Event
Why is socio-demographic data not enough to describe specific target customers?
Why is socio-demographic data not enough to describe specific target customers?Both these guys are approx. plus 50 years old, wear glasses, have a similar income, work in the same business and are born in New York!
But:
Do they read the same magazines?
Do they eat in the same restaurants?
Do they own the same cars?
Are they in the same target group?
Multibrand-Event
2. Brand Portfolio& Brand Positioning
3. Product Differentiation& Product Portfolios
1. Customers4. Brand SpecificMarketing Concepts
Positioning & Brand Values
Product Differentiation
Product Portfolio
Price
Distribution
Marketing / Communication
Brand Portfolio & Missions
Target CustomersDefinition
Fleet Business
Sponsorship / Promotion
Cross brand collaboration does not come naturally – clear framework and rules required
Cross brand collaboration does not come naturally – clear framework and rules required
Multibrand-Event
Example: Multi-Brand Pricing ApproachExample: Multi-Brand Pricing Approach• Balanced ‘Horizontal’ and ‘Vertical’ price positioning
• Price positioning defined vs. competitors and internal brands
Mercedes, BMW
SAAB
OPEL
CHEVROLET
CADILLAC
External Competitive
Situation vs. Target Competitors
External Competitive
Situation vs. Target Competitors
Volvo, Audi
VW, Ford, Peugeot, Toyota, Renault
Fiat, Hyundai, KIA, Citroën
Multibrand-Event
Multi-Brand Dealer Corporate IdentityMulti-Brand Dealer Corporate Identity
Exclusive
+ 9,000 European Sites involved Group Brand
Multibrand-Event
GME’s Multi-Brand StrategyGME’s Multi-Brand Strategy
Upper
Middle
Lower
SIGMA 2004
Social Status& Affluence
Traditional Modern Postmodern
ValueOrientatio
ns
Multibrand-Event
SummarySummary
• GM Europe turnaround progressing but not complete
• Positive sales momentum – first year above 2m units
• Revenue side of business has contributed 2/3 of recent turnaround progress
• Differentiated and complementary Multi-brand strategy
– Structured long-term approach
– Key ingredient for future success
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