ZURICH - General Motors Europe gave Jonathan Browning control of its UK subsidiary Vauxhall in May. Already head of GM Europe's sales and marketing, Browning says he aims to strengthen Vauxhall's market position while simultaneously continuing GM Europe's drive to build stronger links between its European brands and company headquarters here. Browning takes over Vauxhall at a good time. It outsold UK market leader Ford twice in the first five months of this year. He aims to continue that trend plus boost sales of all GM brands in the UK. Browning spoke with Automotive News Europe Correspondent Alex Riciutti.
Does your dual role as Vauxhall chairman and head of GM Europe's sales and marketing signal that GM wants to centralize control of the Vauxhall brand?
Vauxhall is an integral part of the General Motors Europe organization. The same way that Opel is, the same way that Saab is. What we are seeking to do is to keep the same intensity of focus on the Vauxhall brand in the marketplace but at the same time bring the organization ever closer into the GM Europe operation. The structure that we've put in place with myself as chairman and Bill Parfitt as managing director in addition to our existing responsibilities [Parfitt remains Vauxhall's sales director] pretty much mirrors what we've done at Opel and Saab.
At Opel we've got Hans Demant who is head of engineering and managing director. Carl-Peter Forster [GM Europe president] is chairman at Saab. There are a lot of parallels in terms of the structure that we've put in place to allow us to keep the focus on the individual operation but bring the connection points ever closer in terms of how we operate as one organization across Europe.
Do you foresee Vauxhall being merged into Opel?
The simple question is: Why would you want to do that when you've got a brand that is performing well? We've got a couple months [February and April] of market leadership. What would be the sense of making that change?
But you do want to further integrate Vauxhall operations into the overall GM Europe structure?
A year ago we said we were going to run General Motors Europe very much along functional lines. So, the three big functions within Europe of engineering, manufacturing and sales, marketing and aftersales are already running very much functionally across Europe. That's something that we will continue to do.
What is your goal for the Vauxhall brand?
My desire is to see Vauxhall as the most strongly considered brand in the marketplace.
Do you have a chance to topple Ford as the No. 1 brand in the UK?
That's not the goal. The goal is to drive the desirability of Vauxhall [to the strongest position] in the marketplace. There are a lot of things that we need to do in terms of acceptance of product, strength of the [dealer] network, strength of our communications presence.
What distinguishes the Vauxhall brand from Opel from a marketing perspective?
Well, there are a lot of similarities. The three elements that comprise both the Opel and the Vauxhall brands are a very strong emphasis on design, on versatility and flexibility, and on driving dynamics. The point of difference currently in customers' minds is probably in terms of the balance of driving dynamics and versatility. With Opel there is a stronger emphasis on versatility and flexibility and in the UK, particularly with the enthusiasts, more emphasis on the driving dynamics.
Do you tune them differently? The suspensions, for example?
In terms of the sports derivatives, like the OPC, Opel performance cars, or the VXR cars, there is a different suspension setting for those vehicles anyway. And those vehicles are proportionally more important in the UK than in some of the Opel markets. The product is fundamentally the same. The mix of the product may be different and tuned different.
Was there a GM strategy for Europe to take Opel's brand image up-market while introducing Chevrolet at the bottom end of the market?
There was always space [at the bottom for Chevrolet] because Opel/Vauxhall really didn't reach down into that area. That's why it's important to manage the business as General Motors Europe. We're looking for the pieces of this jigsaw to fit together and to develop the story they tell in the marketplace. The role for Chevrolet was always clear for Europe: Chevrolet stands for good value, for dependable, durable products. They should be attractive, mainstream products. On the other hand, Opel/Vauxhall should surprise and challenge.
Your goal was to sell 200,000 units this year for Chevrolet. Do you think you'll exceed that objective?
We were at 95,000 at the end of May and we're on track to meet that goal.
GM has said you would be expanding your Chevrolet dealership network to 1,800 dealers. Are you on track to do that?
Yes. We've got a lot of people interested in picking up the Chevrolet franchise: 1,800 was the objective for the end of this year and we will hit that.
What new types of advertising and marketing tactics are you currently considering for GM Europe?
Opel/Vauxhall brands saw a significant deterioration in the mid-1990s so we are in a particular position of having to get people to re-appraise [the brands]. The Million Mile Test Drive and our brand rejuvenation activity is about getting people to update their perceptions of Opel and Vauxhall.
You've grown your sales at Vauxhall in a shrinking market. You've outsold UK leader Ford in monthly sales twice so far this year.
Year-to-date is tracking very well. In previous years we've had occasional months where we've been market leader. It's interesting, this year we've got two months where we were market leader.
What accounts for that?
Clearly, the acceptance of the Vauxhall product in the marketplace.
Any particular models?
Astra is certainly picking up very well [it was the UK's top seller in February, April and May]. We're pleased with the performance. When you look across the spectrum of the products, whether it be on commercial vehicles or passenger cars, they are performing well, but particularly Astra is running strongly. The other aspect of our presence in the UK is also the growth of Saab and Chevrolet. The combination of those three into the marketplace with a strong distribution network underneath it; those brands are hitting a region of 15 percent [market share]. That is good collective performance across the UK market.
GM says it will be introducing a new top-end model for the Opel/Vauxhall lineup based on the Insignia concept car, is that right?
Carl-Peter Forster was talking about working on a program above Vectra/Signum some of elements of the Insignia are very much part of where design will go, where engineering will go. That segment is evolving and moving away from a standard three-box sedan or station wagon. The body style construct is something we are looking to deliver different into the upper-medium segment.
Will there be other models that will contribute to Opel's evolving brand image?
Well, we always have more ideas than money.
Are you getting resistance from Opel dealers to the expansion of your Chevrolet dealership network?
We have a combination where we look for, in some cases, having dealers who already have the Opel business the Chevrolet contract opportunity.
Are they welcoming it?
It depends on the market opportunity and their specific circumstances. [But] there's no shortage of Chevrolet takers.
Incentives have proved to be damaging for GM brands in the North American market. Do you fear the same could happen in Europe?
I think incentives have always been part of the marketing tool kit in Europe. Some markets have been closer to the US model than others. The UK probably the closest. From our perspective, the most important thing is to understand the effectiveness of incentives and the intelligent use of them in the market is the key. I wouldn't say there is a general trend in one direction or the other.
What trends do you see in Europe?
Well, the competitive intensity is continuing to ratchet up. Certainly the Asian manufacturers are getting stronger progressively across the market. The fine tuning of our marketing tool set is ever increasing in importance. How you position brands, how you promote them, how you communicate them, is requiring ever increasing intensity and focus. And managing a group of brands across the marketplace offers you the opportunity to put a laser-like focus on the role of each brand. The other element is the role of different product segments growing in importance; vehicles like the Zafira, Meriva, or SUVs or compact or superminis. There are a number of product areas that are becoming more decisive.
Western European sales are pretty stagnant right now. First, how do you deal with that? Second, where do you see the most opportunity for growth?
Well, the market is tracking about 2 percent down, year on year. However, there are some markets and segments that are growing, even customer segments. Two of the most important customer segments are female customers and older customers.
So the segments you think are the most important?
Mini, SUV, and the compact and smaller monocabs. Those three segments are showing significant growth.
Vauxhall is still considered a domestic brand in the UK, although most people are aware that it's an Opel, really. So how does that change or affect your marketing?
There used to be this whole notion of British-badged cars in the UK market. That has, to be honest, disappeared.
You think the consumer sees that it's an Opel and there isn't much difference?
It's not so much the consumer thinking it's an Opel. The consumer understands that it is part of a multinational network, a multinational presence in the global automotive market. What the consumer is buying into is very much a recognized customer experience that is delivered through the Vauxhall network. There is a set of products that are very competitive, in terms of engineering and performance in the marketplace. The proof is the performance in the marketplace. We are seeing Vauxhall perform strongly both in the fleet sector and the retail sector as well.
Fleet sales are a large part of the UK market. How does that affect your sales and marketing efforts? What do you have to do differently?
The fleet sector is split into a number of different channels and one of the real strengths of the UK organization is its ability to manage the different subcategories of the fleet market. Whether that be in terms of commercial users, small to medium local business, or large corporate business, rental or governmental or institutional sales. Being able to address very specific sales strategies for each of those groups the UK team have developed that capability and skill set extremely well. One of the things we've asked Bill Parfitt to do is to lead the Europewide fleet sales activity for the whole of GM Europe as well as his current Vauxhall responsibilities. This is a more and more typical way of running Europe operations. We have individuals with specific national responsibilities or geographic ones also taking lead for a particular activity across the whole region. The UK represents a center of expertise in the fleet remarketing, used-car area.