The lion whimpers
When a brand’s good times are over, you notice it. Holden, the darling of General Motors, decided last year (as covered in one of my blog posts) that it would begin badge-engineering Daewoos rather than bring in Opels. Fine, for the bean counters. Not so ﬁne for the consumers. Being less consumer-friendly goes counter to the way brands should be heading.
New Zealand still tends to be more European than Asian in its outlook, given the origins of the majority of the population, and the overall sensibility. Street signs are pictorial, people prefer hatchbacks to sedans, and Ford seems happier ﬂogging Focuses and Mondeos than Lasers and Telstars. At least the Euro cars have a following.
It’s something lost on Holden. For a while, Corsa (a.k.a. Holden Barina), Astra and Vectra were making it Down Under; even the Tigra is being sold in Australia. Holden leapt hugely in the market-place because it offered a tiered range that everyone understood. Once upon a time, the top sellers in New Zealand were easily recited: Ford Escort, Ford Cortina, Ford Falcon. Holden’s Astra, Vectra, Commodore were easy to remember, too.
Now, with the need to ﬁt in Daewoo products, Holden is ﬁnding it hard. The Daewoo Kalos is now the Holden Barina, devaluing that name once more. The Daewoo Lacetti is the Holden Viva. And, we hear, though we keep praying it won’t happen, the Daewoo Tosca will be the Holden Vectra.
No surprises today when news of the Euro NCAP crash-test results hit the airwaves in New Zealand. The news is pretty old, which goes to show just how long it takes some journalists to get the information—it broke in Australia in February, and the results have been around for longer. (Car safety, incidentally, is not my patch.) The new Holden Barina achieved a two-star NCAP rating, about the worst you can get. Its predecessor got four stars in a 2002 test. Holden disputes the results, but I think the brand’s damage has been done, especially with this quotation at GoAuto:
[It] was singled out by Europe’s leading independent crash test body for having what it describes as “the unacceptably high risk of life-threatening injury to the driver's chest.[”]
No one is saying the Daewoo Kalos is a death-trap, but it’s not hard to see how the rumour can begin.
After all, the new Holden Barina is the 2002-launched Daewoo Kalos, a car deleted from New Zealand in 2003, rehashed. It’s not that much newer and certainly less sophisticated than the previous Spanish-built Barina, which was an Opel Corsa C. It handles more poorly, and it essentially reminds you how much better Europeans make small cars compared to Koreans.
I believe people will pay the premium to get a Ford Fiesta now, and Ford must be rubbing its hands with glee, thinking back to the heady days of the 1970s when Escort and Cortina ruled the charts. Posted by Jack Yan, 05:43
business neeeds to remember the mantre: people aren't idiots.
when will companies stop making decisions based primarilly on the bottom line and focus on consumer satisfaction - profits will follow.
as you said, it looks as if they are creating a market that will favour their competition by diluting their product offerings.
Plus, Markoos, shipping a car from Spain is not that much more expensive than shipping one from Korea. The Kalos is a car that Australians didn’t touch before, and Holden thinks by slapping on Barina badges it would sell a few more. This totally ignores the fact that there are buyers who demand quality in a supermini, so I would say those who want a western-sounding brand will get a Ford, and those who don’t care will either opt for a Toyota Yaris or Hyundai.
Old Daewoos aren’t too bad—I still see the odd Pontiac Le Mans here and there—but the fact remains they are underdeveloped compared with their contemporaries. They always have been—the Lanos and Leganza were pieces of junk.
In the UK (and much of Europe), the former Daewoo range was relaunched as 'Chevrolet' early last year. Seriously. They didn't even bother changing the model names, so we now have the Chevrolet Lacetti, Chevrolet Matiz, etc.
The advertising tagline is "Plus, it's a Chevy", which, of course, is not really true. Most UK buyers - if they're aware of Chevrolet at all - would associate it with the Corvette, which has been imported in limited numbers, and has nothing at all in common with a Korean-developed budget family car.
See also http://www.brandrepublic.com/bulletins/digital/article/234218/news-analysis-long-hard-road-ahead/
It strikes me as entirely cynical: as with Holden, it pains me to see brands that once had some meaning and values being applied without thought of long-term consequence.
The CityRover debacle in the UK - it was a rebadged Tata Indica - http://www.austin-rover.co.uk/cityroverindexf.htm - surely should have been sufficient precedent/warning to other manufacturers planning the same kind of brand dilution purely for intended short-term gain...
# posted by Dan Lockton: 5/10/2006 11:56:00 AM
Thanks Jack. I too have tried to ascertain that does GM sell a brand or a product ? What I believe you cannot sell a product
without a brand and the other way round. A good brand requires a good product to sell and eventually live in the customers'
mind and it's always a good product that makes a good brand ultimately. The relation is a two-way one but GM seems to have been trying to prove it all wrong ! When they entered in India with an overpriced 1994 'OPEL' Astra [then outdated in Europe] as a premium brand [and product] the response was lukewarm. Later they tried to 'blaze' the sales figures with the launch of 'OPEL' Corsa [in the form of a notchback which was pretty successful in Brazil as 'VAUXHAUL' Corsa] but again
positioned [and priced] it as a premium product [and brand] which actually it was not. Customer response was this time not the same lukewarm as earlier. It was cold. Two more variations followed - an estate ['Swing'] and a hacthback ['Sail'] but sales didn't really improve. Then a couple of CEOs [and redlined balancesheet] later GM India announced that they would 'do away' with the 'premium' brands in India and rather concentrate on 'value for money' brands like 'CHEVROLET'. Meanwhile
they had finalized acquisition of the Daewoo assets around the world [barring India - I didn't understand the strategy behind
it when they have all along maintained that India is an important country for GM in terms of strategic investment]. First
they launched Daewoo Nubira as Chevrolet Optra [without any change but the name]. But by then Indian customers who have always expected a good product from GM have perhaps realized that they would never get it ! And the response was 'not too bad'. Then GM launched Chevrolet Tavera [a product from the days of my Dad]. But the sales figures never blazed. It was only in 2006 that GM lauched a contemporary product in India - Chevrolet Aveo. And if one goes by the competition it's a
good thing going. So until GM has tried to sell brands in India it never took off. It's now with a good product that they can expect better sales. It could also be said that when the lion whimpers in the developed countries it expects a new lease on life in the developing countries !
Dan, I agree. Plus where do folks go for info when they buy a car these days? Online. Pretty soon the Holden Barina buyer will know (s)he is getting old-tech Daewoo, with a dismal safety record.
Chevrolet means American guts, not Korean budget-priced, and when I look at the UK range pre-Daewoo, you are right: Corvette, Camaro, Blazer. If GM was investing in a dealer network, a more appropriate brand would have worked; plus Daewoo had a fairly solid reputation in the UK when the original Nexia and Espero were launched.
In Canada, your Chevrolet Kalos, Nubira and Evanda are sold as the Chevrolet Aveo, Optra (as in India) and Epica; in the US, the Kalos is the Aveo, so at least there’s one American-destined Chevy that is sold on both sides of the Atlantic. But it doesn’t make it right for the customer or right for the brand, especially when Chevrolet is showing Camaro concept cars and it’s getting covered by the British press.
There’s little disguising the fact these mainstream models are Asian: many look Asian (despite having western designers working on them), they are underdeveloped, and they are arguably a generation behind their competitors. The current Lacetti and Nubira are on the old platform, and even when that car was new it was junk. When the fat-assed Daewoo Tosca—let’s hope they call it Holden Apollo and not Holden Vectra—comes out, it will end all of Holden’s goodwill in the mid-size sector as a brand with sophisticated product.
Rohan, your summary of GM’s folly in India is interesting. I remember the Opel Astra F being sold in India, and GM seriously underestimated the sophistication of Indian consumers. Ditto the Chevrolet Sail (Opel Corsa A). Quite insulting, in my book. Mercedes-Benz did the same when the locally built E-Klasse was launched there when rich Indians would actually prefer the S-Klasse.
The Chevrolet Optra in India is probably an acceptable name to market the car there, but only because it is a Chevy in neighbouring countries as well, and where Chevrolet did not have a strong presence before. In India, Chevrolet, as a brand, probably establishes what GM originally wanted when it said it was to be its value leader.
I think it had to start somewhere and the new Aveo wasn’t ready; plus it might be easier to extend the brand down from Optra to Aveo than the other way around.
However, I do believe (as I sense you do) that it was foolish to say Opel was premium when it is in fact mainstream—Indian consumers who can afford the car can also look on the ’net and discover for themselves. It is fooling the customer, losing years of sales when a well-priced Opel Corsa could have beaten the Ford Ikon, the Marutis, and other Indian cars.
Correction: the news broke after crash test results were released by the New Zealand Land Transport Safety Authority, quoting Australasian tests.
Dan, I also remembered that a Top Gear episode in the UK exposed the Rover 100 or Metro’s poor crash test results, forcing Rover to kill the car ahead of time. If Holden wants to keep its custom in the B-class sector, then it should revert back to the Corsa, which people liked.
Jack yan and all the other Barina crash score bandwagen jumpers should note that in New Zealand for every new car sold there, TWO used Japanese imports come into that country. Thus the average age of a car in NZ is 12 years and as a result the crash performance of more than 80 percent of the road fleet is WORSE than the Barina's. Such cars have no need to pass any crash tests, they only need to have been manufactured after 1997.
By the way, the 1994 to 2000 C-class Mercedes-Benz also gets two stars in Euro NCAP.
# posted by motornoter: 6/17/2006 05:38:00 AM
Motornoter, here are a few points: (a) who else has given a branding analysis about this Holden Barina scandal? I don’t see a bandwagon, and that is what I have been talking about; (b) I have been writing about my concerns, not related to safety, about Holden sourcing from Daewoo for a long time, well before the NCAP tests of the Daewoo Gentra, so if there is any bandwagon, I started it in 2005; (c) your position is that as long as there are used cars that are less safe than new cars, we should accept lower new car safety standards. These two are separate arguments, and one can legitimately argue that used Japanese imports should be limited on safety grounds—but I say it has little to do with this discussion. (You can tell Allan Dick that, too.) Comparing apples to apples—that means new cars to new cars—the Kalos is substandard, and there can be little defence that Holden has not been straight with the New Zealand public. (Saying that the Kalos scored ﬁve stars in an American test when the side impact score was two stars is plainly deceptive.) Finally, (d) yes, I remember the C-Klasse had a bad score—but we weren’t blogging then, it’s a used car, and it was probably better than the crash-test results of the preceding 190. Mercedes’ quality may have dipped, but its safety testing didn’t take a retrograde step with a succeeding car.
Holden in New Zealand was selling the Astra and Vectra before Australia did - it was spared Button Plan monstrosities like the Holden badged Toyotas.
At the time, Ford was assembling Lasers and Telstars locally in a joint venture plant with Mazda (alongside the 323 and 626 twins). After that closed, it switched to the Escort and Mondeo, although had to switch back to the Laser because of costs.
However, the Focus in both countries is now imported from South Africa, as is the VW Golf and Jetta, and the Toyota Corolla. The Opel Corsa and Astra are also built in South Africa, but this has escaped Holden bosses on both sides of the Tasman.
The argument is that Holden have got a close tie-up with GMDAT, and is provides Daewoo with the Statesman. Given the parlous stae of Daewoo, GM should have shut down its R&D, and had the Korean factory producing Opel designs again.
At least Kiwis will be able to get used Opel models from Japan (the Corsa is called the Vita). The Mondeo didn't reach New Zealand until 1997, but there seem to be loads of pre-97, pre-facelift models on sale now.
Apparently the next Corsa will be produced by Daewoo, anyway.
# posted by ukcar: 9/05/2006 03:37:00 AM
nice car pity the fuel figures are a work of fiction. Vauxhall astra 1600, same engine 45 mpg fully laden and driven hard Lacetti statin waggon same conditions 30 mpg and chevvy tried to tell me this was because we had a more efficient engine. Need I say no morePost a Comment
# posted by Anonymous: 1/02/2008 07:18:00 PM
Links to this post:
NoteEntries from 2006 to the end of 2009 were done on the Blogger service. As of January 1, 2010, this blog has shifted to a Wordpress installation, with the latest posts here.
With Blogger ceasing to support FTP publishing on May 1, I have decided to turn these older pages in to an archive, so you will no longer be able to enter comments. However, you can comment on entries posted after January 1, 2010.
Individual JY&A and Medinge Group blogs
DonateIf you wish to help with my hosting costs, please feel free to donate.
Copyright ©200210 by Jack Yan & Associates. All rights reserved. Photograph of Jack Yan by Chelfyn Baxter.