GM bets big on Trax for Europe turnaround

Europe is a big concern for General Motors as well as other carmakers. The Detroit-based auto giant lost $1.8 billion in the region last year, and the losses this year, industry watchers predict, could top $2 billion.

In order to achieve the carmaker’s goal of becoming profitable by mid-decade in the regions, Susan Docherty, president and managing director of Chevrolet Europe, shoulders a heavy responsibility.

“Last year, Chevrolet sold 195,000 cars in Western and Central Europe for a market share of 1.28 percent, an all-time record for the brand, while the overall market declined by 9 percent,” the Canadian national currently based in Zurich said in a recent email interview with The Korea Herald.

“While globally, Chevrolet is the fourth-largest automotive brand behind Toyota, Volkswagen and Ford, it is still a small player in Europe but with viable growth ambitions.”

The former vice president of international operations sales, marketing and after-sales service of GM took the helm in Europe in January last year.

Even though no carmaker is escaping troubles in Europe where car sales fell to a 19-year low last year, she pins high hopes on new models, especially the latest Chevrolet Trax, the brand’s first compact SUV whose development has been led by GM Korea. 

“Our GM Korea partners are doing a tremendous job in delivering vehicles that are seen as true Chevrolets in the European market place. We are very happy with the level of quality of the products that we receive from our team in Korea,” said the European chief, who is also a board member of GM Korea.

“The Trax is a very important new entry for the Chevrolet brand in Europe, in a segment where we did not have an offer before. It is a segment with a lot of opportunity and not that many players yet.”

Amid the growing acceptance of small-engine, fuel-efficient vehicles globally, carmakers have recently been betting big on the niche segment ― compact SUVs. The Trax, which made its Korean debut in February, is the first small SUV by GM.

According to Docherty, the small SUV segment is one of the fastest-growing car segments with an annual growth rate of 17 percent. The emerging segment could make up 3 percent of the total passenger car market within the next five years.

The Trax, as a latecomer in the segment, must compete not just with existing powerful models such as the Nissan Juke and Skoda Yeti but also with its in-house rival, the Opel Mokka.

“While the Chevrolet Trax will appeal to customers looking for a bold, practical but affordable small SUV, the Opel Mokka customers will look for a more innovative car offering premium features which you normally only find in larger SUVs,” she said, adding most automotive groups in Europe see competition among their own brands.

The European chief said it would take a while until the European car market returns to former levels but it has a full potential to be the second-largest automotive market in the world, behind China.

“We also know that the average age of the cars in Europe is around eight years, so when the market does comes back, there will be many people looking for a new car and we want to be on their shopping list,” she said.

She also expected a strong performance of its Korean competitors Hyundai and Kia in Europe, saying both brands, together with Chevrolet, are among few brands that saw a year-on-year increase in their market share in the region.

“When the European economy began to slow down, the brands that continued to grow were able to capitalize on the increasing customer interest in value, in downsizing to smaller, more fuel-efficient cars and attractive warranty and ownership offers,” she said.

“At Chevrolet, we look to also capitalize on the market opportunities we see, launching the Chevrolet Trax small SUV, which we are confident can be very successful, as it is also the new entry coming from the ‘inventor of the SUV.’

“We continue to build the brand so when the market comes back, we are on the shopping list of the consumers looking for a new car.”

By Lee Ji-yoon (jylee@heraldcorp.com)