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GME Multi-Brand Strategy Jonathan Browning, GME Vice President Sales, Marketing and Aftersales Jonathan Browning, GME Vice President Sales, Marketing and.

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Presentation on theme: "GME Multi-Brand Strategy Jonathan Browning, GME Vice President Sales, Marketing and Aftersales Jonathan Browning, GME Vice President Sales, Marketing and."— Presentation transcript:

1 GME Multi-Brand Strategy Jonathan Browning, GME Vice President Sales, Marketing and Aftersales Jonathan Browning, GME Vice President Sales, Marketing and Aftersales

2 Multibrand-Event Overall 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

3 Multibrand-Event GM Europe Turnaround GM Europe = 22% of GM’s global vehicle sales European turnaround program started in 2000 Balanced between structural cost reduction and revenue/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

4 Multibrand-Event Increasing Sales in Total Europe GME Registrations 1 st time above 2 million units Units (000)

5 Multibrand-Event 2006 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 Aftersales net sales growth 6%

6 Multibrand-Event GME Revenue and Aggregate Contribution Margin Development Index: 2004 = 100% Revenue Total GME (O/V,SAAB, and P&A) excluding PT and Allied IPC. Aggregate Contribution Margin

7 Multibrand-Event Contribution Margin and Structural Cost Structural Cost Percentage of Net Sales Contribution Margin Structural Cost reduction = $2.0 B

8 Multibrand-Event Benefits of Rebalancing Fleet Mix Index 2004 = 100

9 Multibrand-Event Astra 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

10 Multibrand-Event Pressure From Premium & Value Markets 14% 67% 19% 58% 23% Premium 2.8 Million units CY05 Mainstream 8.6 Million units in CY05 Value 3.2 Million units in CY05 21% 54% 25% Western Europe Passenger Cars by Sub-Segment

11 Multibrand-Event Eastward Sales Shift – Pressure on Margins Total European Industry, Share of Sales by Sub-Region 88% 6% 77% 12% 11% C + E Europe: +11% pts ’95-’12

12 Multibrand-Event Aggressively Pursuing Growth Opportunities in Russian Market

13 Multibrand-Event Profitable Retailers Strong Brands Sales Effectiveness Aftermarket Penetration Lean Organization GME Sales, Marketing and Aftersales Strategic Priorities Maximize Aggregate Contribution Margin Grow Volume & Mkt Share Improve Cont. Margin per Unit Revenue Growth Improve Contribution Margin per unit

14 Multibrand-Event GME’s Multi-Brand Strategy Upper Middle Lower  SIGMA 2004 Social Status & Affluence TraditionalModernPostmodern Value Orientations

15 Multibrand-Event 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?

16 Multibrand-Event 2. Brand Portfolio & Brand Positioning 3. Product Differentiation & Product Portfolios 1. Customers 4. Brand Specific Marketing Concepts Positioning & Brand Values Product Differentiation Product Portfolio Price Distribution Marketing / Communication Brand Portfolio & Missions Target Customers Definition Fleet Business Sponsorship / Promotion Cross brand collaboration does not come naturally – clear framework and rules required

17 Multibrand-Event Example: 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

18 Multibrand-Event Multi-Brand Dealer Corporate Identity Exclusive + 9,000 European Sites involved Group Brand

19 Multibrand-Event GME’s Multi-Brand Strategy Upper Middle Lower  SIGMA 2004 Social Status & Affluence TraditionalModernPostmodern Value Orientations

20 Multibrand-Event Summary 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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