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GM gears up for European expansion

By John Griffiths in Detroit
Published: 14/1/2008 | Last Updated: 14/1/2008 23:35 London Time

General Motors is to expand its production and distribution capacity within Europe to build 700,000 Chevrolet cars a year in the region by 2010 and cross the 1m a year sales threshold by 2012.

Both output and sales volumes represent considerably more than double 2007 levels for what has become one of the world's most rapidly growing brands.

They compare with just 162,000 sales and token output in 2003, the year in which GM rebranded Daewoo cars as Chevrolets in Europe after taking over the collapsed South Korean carmaker.

The European expansion forms part of an intensified drive to create a global brand identity for Chevrolet - until recently seen mostly as a blue-collar brand for North America - by integrating into a single range larger, US-built models and smaller cars built in Korea and Europe.

Last year, but for supply constraints, Chevrolet could have sold half a million units in the region, Wayne Brannon, executive director of Chevrolet Europe, told the Financial Times at the Detroit show Monday.

By the end of the year it had sold 457,000. "We're still having trouble believing the sales growth."

The range of Chevrolet-branded cars to be sold within Europe is also to be more than doubled, with new products including small MPVs (so-called people carriers) and "lifestyle" pick-up vehicles popular in North America.

Chevrolet is to tap production capacity at plants around the world to meet demand. These include a new facility at St Petersburg in Russia, a modernised former Daewoo plant in Poland due to start in April with a capacity to build up to 150,000 units annually of the Aveo small family car, and an expanded joint venture plant in Uzbekistan.

Mr Brannon said: "At this stage I'm not quite sure where all the production will come from; GM operations in China and India are likely to build some as well."

Chevrolet's Korean operations, which have also been given global responsibility for design and development of GM's small hatchback models such as the Vauxhall/Opel Corsa, are already stretched to capacity making 1.9m built-up cars and kits for assembly outside South Korea.

As part of the brand-building, a completely new Chevrolet Camaro - but bearing strong resemblance to one of North America's most revered affordable sporting cars of the 1960s and 1970s - is also to be sold throughout Europe from 2009, including right-hand-drive versions for the UK.

The region's 2,200 dealers, of which more are to be re*cruited, have also been told that some are likely to be offered the opportunity to sell GM's Porsche and Ferrari-rivalling, 200mph Corvette.

This would be alongside the independent European distributor, Dutch-based Kroymans Corporation, it appointed several years ago to market both its Cadillac and Corvette brands.

The Chevrolet name was quietly dropped from the Corvette as part of the Kroymans agreement, amid unease that the low-cost South Korean Chevrolets already flooding into Europe might tarnish the GM supercar's image.

Now, however, it is to be revived as part of the brand-building - "the Corvette's always been a Chevrolet", said Mr Brannon.

He said GM would place much more emphasis on the heritage of the Chevrolet brand, which GM executives have now concluded has only positive connotations within Europe.
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