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s.mueller

Then & Now: 100 Years of Chevrolet

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Chevy turned 100.
Reason enough to come out with a nostalgic tribute to the history of Chevrolet which accompanied the lives of so many Americans in the last century. Through good times and bad times just like the brand itself had its ups and downs. Or to say it in the words of a 1991 Chevrolet „Heartbeat of America“ TVC, „the best things have always been those that last“.
For more than 100 years Chevorlet has made use of patriotic and nostalgic imagery to connect with the customers and to persuade them to only buy a true American brand as is Chevrolet (more or less as we all know). But after 100 years one can say this really pulls or as this recent commercials says, „Chevy runs deep.“

Oh one thing to add: As this current campaign proves, „Chevy“ is still being used in communications, other than rumor had it in 2010. –> Link

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s.mueller

Chevrolet to Bury "Chevy" in Corporate Communications

On June 10, I came across several articles dealing with an internal GM memo which apparently prohibited its staff to use the name „Chevy“ when speaking of Chevrolet models or the brand in general. „Why this?“ you may wonder. Isn’t this term common all over the U.S or even the world and doesn’t this express that to many people Chevrolet is more than a brand, something that has been part of American lives for centuries and that people have strong affection for? Damn right! And what is the corporate benefit of only using Chevrolet instead of Chevy? Should Coca-Cola avoid the use of Coke? Surely GM’s marketing department has had its reason for this. I use this opportunity to provide you with some interesting facets of the history of the US automobile market and the central role of patriotism.Many American automakers make heavy use of patriotism in commercials. Why? Well, simply because it works and it helped sell cars for many centuries.

When in the late 70s Japanese makes with surprising product quality and price-quality-relation entered the U.S. market, pointing to U.S jobs and the economy helped push sales of U.S. automobiles. Using the country-of-origin effect to gain a competitive advantage towards foreign makes and playing the patriotic card is what I term „patriotic marketing.“ Especially the U.S. is a country most popular for its loyalty towards its nation and its cultural heritage and thus patriotic marketing has seen great success throughout different industries. Wal-Mart, Ford, Chevrolet and Budweiser are just some examples. And patriotic marketing is not a recent phenomenon. It can be found in markets all over the world. In the the U.S. it has been applied already in the days of the early colonies in order to support the local economy and to push the independence from British goods and dominance.

The sad side: Patriotic marketing has the same effect on domestic economies as other trade barriers have. They hinder foreign goods from entering the market. If they had been produced more efficiently , the tariffs make them more expensive than they actually would be and thus less attractive to the US consumer. Unfortunately this did not give U.S. auto brands in the 80s the time and space to improve in terms of productivity and quality. Instead patriotic marketing just helped to distract consumers from the obviously lower quality compared to German or Japanese makes. By avoiding direct competition and by producing specifically to a patriotic US target group, US automakers lost touch of the Japanese and European competitors. This is the reason why in the past you could barely sell US automobiles outside of the US. As a result GM, Chrysler and Ford all have been struggling in the beginning of the 21st century.

Status Quo: Today Ford and GM have realized that future market share comes from quality and innovation and from producing globally competitive vehicles that are attractive to auto buyers all around the world. Ford today is known for a strong focus on Social Media. Why? To connect with young target groups and in order to rejuvenate the brand. In the US more and more small-sized cars enter the U.S. market and GM is among the leaders when it comes to Hybrid technology or battery-powered vehicles such as the promising Opel / GM Ampera. Also GM started to introduce successful European Opel models in the US (under the Saturn brand). And they did NOT sell Opel, which may be playing a central role for the future of the GM corporation.

Learning: Patriotism may work nicely in domestic markets but in a global economy values such as quality, innovation and fit-to-market is what matters. President Obamas decision against a major Buy American campaign to boost domestic economy may have cost a short-time boost, but in the long run and in a global context, this was certainly the right decision. The recent financial reports by Ford and GM show that they obviously have made the turn: They again make good money with better vehicles. And Toyota who has always been ahead in terms of quality and reliability now has the quality troubles…. If this GM memo has been a move away from the patriotic American background towards a more global positioning, I cannot tell. Future commercials may provide an insight. But I am sure that the future of GM can only lie in becoming a strong global brand such as Ford or VW. Only then you can selll enough vehicles, profit from economies of scale and invest in order to be able to equip your vehicles with the latest technology.

Today, we are experiencing exciting times in the global automobile industry. Never before have there been challenges such as gas prices, battery technology, etc that may fundamentally change the auto business.

But let’s get back to America’s love for Chevy and how important a role Chevy had been playing in the past. When writing my master’s thesis on „Patriotism and American Values in U.S. Advertising“ I came across numerous examples of patriotic marketing applied in US TV commercials. And I must admit that some of them also have a strong impact on me. To many proud Americans, these commercials may feel like a confirmation in their beliefs, in the cultural values many Americans so proudly cherish. I have provided you with a selection of commercials that are filled with references to American cultural values such as „work ethic“, „freedom“ „risk-taking“ and „individual achievement“. And in almost all of them you come across „Chevy“. Enjoy these colorful, moving commercials. Some of you may find them pathetic or stereotypical. But just imagine how these images may move a patriotic American citizen and ease the complex purchasing process…

1994: „Like A Rock“

2007: Chevrolet Super Bowl Commercial „Ain’t We Got Love“

~2006: This Is Our Country (Chevy Silverado)

1991: Chevy Truck „The Heartbeat of America Campaign“

1992: Chevy Like a Rock

Ads like these show that Chevy is a positive synonym for Chevrolet, a brand that helped make America what it is today. A brand that brought mobility to generations of Americans.

Article dealing with the issue:
http://www.reuters.com/article/idUSN1024152620100610

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s.mueller

GM to retain Opel – what a foul play!

What long looked like a neverending story got an unexpected turn. GM tonight decided to keep Opel.
GM who first played the poor victim of economic downturn and a US auto market that got ever tougher and who addressed governments for financial aid in order to maintain thousands of jobs now showed its real face. Among the wide range of similar brands of inferior quality, Opel can truly be called the most promising of all GM brands. For months, the German government has been working hard to support Opel and to navigate the corporation towards what seemed to be the most promising of buyers: Magna together with Sberbank. This may not have been the ideal result but at least it saved Opel and thus German engineering from Chinese copy methods. Now what? Time will tell. By keeping Opel GM maintains access to European-standard automobile technology and the production lines for small vehicles which may become one of the fastest growing automobile segments in the U.S. – given that gas prices will not fall to levels before 2006.

How can GM all of a sudden afford to keep Opel? According to GM auto sales in October have risen by 4 per cent compared to the previous year which was mostly due to the core brands Chevrolet, Cadillac, GMC and Buick.

German politicians and managers alike are very displeased about the game GM has been playing for several months.

I seriously wonder if the brand Opel and the the German Chevrolet models will not be negatively affected by this strategy. There is a latent threat that the strong sympathy and support which Opel has been experiencing in the last months may turn by 180°. Opel could be perceived to be less German and more capitalistic and greedy, sokaing up German taxpayer money…

Curious about what is to come….

Update:
One day has gone since GM announced to keep Opel. As expected, German government representatives are „pissed“, European Opel employees scared about the future, and Magna angry about this sudden change of plan. Many wonder how GM plans to manage the restructuring of Opel, what will happen to the European factories and whether GM will make its statements true and lay off some 10,000 employees. Experts expect that GM will increase pressure on the current European factories and try to play them off against each other in the struggle for survival.

I am skeptical about whether GMs strategy has a long-term perspective. They are running risk of pissing off European consumers, auto unions and European governments. How then do you want to increase sales in Europe? And how will rival automakers react to this move? Ford is already ahead of competition in the U.S. and by introducing more and more European technology in the U.S. and by focusing on efficiency instead of pure power and size their head start may manifest.

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s.mueller

Ford not recognized as a German brand

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The drama about German automaker and GM subsidiary Opel is not only an advantage for rivaling automakers. Although profiting from consumer uncertainties by winning former Opel drivers, the worries and the public discourse about the future of the Opel brand also did harm Opel rivals. According to a current FAZ article, a central insight for Ford was that Opel not Ford is generally being perceived as the more German of the two brands. Thus it can be said that the Opel crisis also helped Opel to strengthen consumer loyalty and to interest patriotic Germans for their affordable vehicles. To Ford this poses a completely new marketing challenge. Still suffering from the image of producing conservative, emotionless cars, sympathy for Ford may have further decreased. But it should also be mentioned that in the US as well as in Germany, Ford’s management had taken early and wise measures to prepare for the current auto crisis. Thus a scenario similar to that of Opel would not seem credible (begging for givernmental aid,…). So Ford’s marketing challenge for the future will be to produce more emotional cars, such as the Insignia or new Astra and to improve its perceived ‚German-ness‘.
One consequence of the current auto crisis might be that that markets which formerly were a taboo are now considered attractive segments. Ford and even Fiat (together with Chrysler) are considering entering the US automobile market. The cause? Perhaps this will improve competition and contribute to the overall quality of US makes. Still today, these millions of cars American automakers are producing each year simply won’t sell anywhere but the US. Europe is simply much more advancaed and competitive. If this is the scale for US makes, then and only then, there is a chance that they will survive in the long run.

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