Why General Motors lost the global marketing challenge...

General Motors had a perfect start to a new world after the second world war, but it did not exploit its chances, as we know.In Europe, General Motors had products which would have fit the market situation perfectly, but failed to bring the smaller Opel to the US market.

... and will be gone in less than ten years as an independent company

by Jimmi Rembiszewski

Looking at GM's business and brand strategy (or rather the lack of any) over the past 50 years, you cannot be surprised by the fall of a former world leader. It will most probably end with the sale of GM’s European division. Why did it go so wrong for the clear post-world war market leader?

It had a perfect start to a new world after the second world war: it was market leader in the United States, by far the biggest and most profitable car market with great brands recognized all over the world, such as Cheri, Cadillac, and Buick. Everybody saw them in Hollywood movies and dreamt about them.



Was this not the perfect starting position for GM to establish itself as the leader in the world with Ford as its only real competition? Most of GM’s other competitors, i.e., German, Italian, French, and Asian manufacturers, were looking to restart from scratch.

In Europe, GM eventually owned two strong brands with Opel and Vauxhall, and made it into Europe’s two biggest markets, Germany and the UK.

It did not exploit its chances, as we know. What followed was the resurgence of German, Italian, and French cars, using the car boom in the 50s and 60s when a car became the symbol of the postwar economic boom.

GM was literally sitting on products and brands that could have taken the emerging global market, but left it to various local businesses and brands. It was the most amazing lack of a corporate/global brand strategy.

For example, its portfolio in the US, Germany, and the UK was not coordinated. How can a company not merge Opel and Vauxhall to form one brand as a spring board to compete at least in Europe against Volkswagen, Ford, FIAT, Mercedes, etc.?

The next big failure in terms of an integrated brand and product strategy came in 1973, when the oil price went through the roof. As a result, global demand for smaller cars led to major reshaping of the product mix. This included the US market, where there was demand for smaller cars consuming less petrol.

In Europe, GM had products which would have fit the market situation perfectly, but again it failed to bring the smaller Opel, for example, to the US market, although Opel did well in Germany.

This opened the door for German and particularly Japanese manufacturers to establish themselves in the US. Again, a vital fault of the GM leadership at the time.

The last chapter began in the late 1980s, with the fall of the Berlin Wall and the opening up of a truly global market.

With brands and products like Opel, GM had the perfect contender to build a global brand, including the “Made in Germany” badge, which in most parts of the emerging markets stood for superiority in auto quality.

But again, GM tried to use brands from the US to cater to these new markets, which wanted value for money offers instead of outdated brands associated with old US movies and of inferior quality, i.e., Chevrolet models as low-priced offers.

This lack of a global vision and a brand strategy is at the heart of the sad GM story, leaving it mainly a US-centric company.

That will not be enough to master the challenges of the next chapter of the car industry, which is on the verge of total change and in which new breakthroughsfrom electronically powered to self-driving carswill be the future.

A relative small player will not have the funds or resources to play this game. Hence, I think GM will be taken over in the next decade. And all because the lack of a truly global brand strategy and its slowness in adapting to new challenges.

 

READ MORE FROM J. REMBISZEWSKI

From Great to Gone: The downfall of the Old Industry
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