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Transcript of Central & Eastern Europe Developments Automotive News Global Conference - Detroit Jan ’08 Chris...
![Page 1: Central & Eastern Europe Developments Automotive News Global Conference - Detroit Jan ’08 Chris Lacey – General Motors.](https://reader035.fdocuments.us/reader035/viewer/2022062516/56649d995503460f94a84035/html5/thumbnails/1.jpg)
Central & Eastern Europe Developments Automotive News Global Conference - Detroit Jan ’08 Chris Lacey – General Motors
![Page 2: Central & Eastern Europe Developments Automotive News Global Conference - Detroit Jan ’08 Chris Lacey – General Motors.](https://reader035.fdocuments.us/reader035/viewer/2022062516/56649d995503460f94a84035/html5/thumbnails/2.jpg)
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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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) Per Capita (USD)Russia 986 940 Slovenia 22 079Moldova 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 !
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To put the Region in perspective
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Diverse demand and usage
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How are they developing ?
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
2001 2002 2003 2004 2005 2006 2007 (0+12)
CE EE Russia
Automotive Industry Market – C&E Region
13,30% of Europe4,60% of Global
25,10% of Europe8,70% Global
Annual Growth 20%
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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
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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.
![Page 9: Central & Eastern Europe Developments Automotive News Global Conference - Detroit Jan ’08 Chris Lacey – General Motors.](https://reader035.fdocuments.us/reader035/viewer/2022062516/56649d995503460f94a84035/html5/thumbnails/9.jpg)
The right Partners within GM for Product:
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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
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GM Manufacturing Footprint in C&E Region
Non-GM CKD/SKDZAZ (Ukraine)
Azia Avto(Kazakhstan)
Non-GM SKD
St. Petersburg Shusari
Avtotor (Russia) Non-GM SKD/CKD
Zastava (Serbia)
Non-GM CKD/SKD
FSO (Poland)Non-GM SKD/CKD
Gliwice (Poland)
UZDW(Uzbekistan)
Non-GM CKD/SKD
GM Avtovaz (Russia)
Non-GM CKD/SKDZAZ (Ukraine)
Azia Avto(Kazakhstan)
Non-GM SKD
St. Petersburg Shusari
Avtotor (Russia) Non-GM SKD/CKD
Zastava (Serbia)
Non-GM CKD/SKD
FSO (Poland)Non-GM SKD/CKD
FSO (Poland)Non-GM SKD/CKD
Gliwice (Poland)Gliwice (Poland)
UZDW(Uzbekistan)
Non-GM CKD/SKD
GM Avtovaz (Russia)
JV CKD
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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
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Innovative customers need to be served well !
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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
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The right Partners for Distribution & Repair
NPBT
n.a.
2,07%
2,75%
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1997 2001 2007
un
its p
er
deale
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No
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Average Throughout
No of sites
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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
![Page 23: Central & Eastern Europe Developments Automotive News Global Conference - Detroit Jan ’08 Chris Lacey – General Motors.](https://reader035.fdocuments.us/reader035/viewer/2022062516/56649d995503460f94a84035/html5/thumbnails/23.jpg)
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
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Operational Difficulties and Legislation
We try hard not be lost in the complex maze…
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9.0%
7.6%7.1%7.2%
5.7%
4.4%
3.8% 4.0%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2001 2002 2003 2004 2005 2006 2007*
0
100,000
200,000
300,000
400,000
500,000
600,000
GM volume GM Mkt. Sh. Opel Mkt. Sh. Chevrolet Mkt. Sh.
100K
522K*
2001 through 2007 – A Success StoryGM Volume & Share Development – Central & Eastern Europe
*Excludes 180K GM Daewoo Kits sold in the region in 2007
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……………..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
![Page 27: Central & Eastern Europe Developments Automotive News Global Conference - Detroit Jan ’08 Chris Lacey – General Motors.](https://reader035.fdocuments.us/reader035/viewer/2022062516/56649d995503460f94a84035/html5/thumbnails/27.jpg)
….and finally ….Emerging Markets ??
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……………..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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Playing To Win
Central & Eastern Europe