GME Multi-Brand Strategy Jonathan Browning, GME Vice President Sales, Marketing and Aftersales Jonathan Browning, GME Vice President Sales, Marketing and.

GME Multi-Brand StrategyGME Multi-Brand Strategy

Jonathan Browning,Jonathan Browning,GME Vice President Sales, Marketing and AftersalesGME Vice President Sales, Marketing and AftersalesJonathan Browning,Jonathan Browning,GME Vice President Sales, Marketing and AftersalesGME Vice President Sales, Marketing and Aftersales

Multibrand-Event

Overall European Market ObservationsOverall European Market Observations• Moderate global economic expansion underway

heading into 2007

• Western European growth is near-trend levels

• Industry demand a record 21.7 million units in 2006

• Stable industry fundamentals for 2007

• Segment growth at low-end and premium

• Industry wide negative Net Price

• Regulatory/policy pressures continue to drive costs

Multibrand-Event

GM Europe TurnaroundGM Europe Turnaround

• GM Europe = 22% of GM’s global vehicle sales

• European turnaround program started in 2000

• Balanced between structural cost reduction andrevenue/contribution margin increase– Successful labor negotiations improved plant and workforce

flexibility– Headcount in Europe cut by 30% since 2000

(from 88,000 to 60,000 employees)– Product portfolio completely overhauled– Improved measured and perceived quality of vehicles – Focused on revenue and margin improvement

Multibrand-Event

1.7641.820

1.9561.983

2.002

1.500

1.700

1.900

2.100

2002 2003 2004 2005 2006

Increasing Sales in Total EuropeIncreasing Sales in Total Europe

GME RegistrationsGME Registrations11stst time time above above

2 million 2 million unitsunits

Un

its

(00

0)

Multibrand-Event

2006 Sales Results2006 Sales Results

• Record sales of +2 million vehicles

• Sales growth in Eastern Europe (+59%)

• Record sales volume for Saab (+10%) and Chevrolet (+16%)– Saab volume up in all major markets– Chevrolet Russia +67%

• Opel/Vauxhall – focus on profitable sales– Zafira/Meriva #1 in monocab segment – Astra #2 in compact segment

• Cadillac +22% vs. 2005• Aftersales net sales growth 6%

Multibrand-Event

GME Revenue and Aggregate ContributionMargin Development

GME Revenue and Aggregate ContributionMargin Development

100102

104

90

100

110

2004 2005 2006

Ind

ex:

20

04

= 1

00

%

RevenueRevenue

Total GME (O/V,SAAB, and P&A) excluding PT and Allied IPC.

Aggregate Contribution MarginAggregate Contribution Margin

Multibrand-Event

Contribution Margin and Structural CostContribution Margin and Structural Cost

1998 1999 2000 2001 2002 2003 2004 2005 2006

Structural Cost

Percentage of Net SalesPercentage of Net Sales

Contribution Margin

2000-2006 Structural Cost reduction = $2.0 B

Multibrand-Event

Benefits of Rebalancing Fleet MixBenefits of Rebalancing Fleet Mix

Index 2004 = 100Index 2004 = 100

100%

80%92%

0%

20%

40%

60%

80%

100%

120%

140%

Index Rental Volume

2004 2005 2006

100%

125%

153%

80%

130%

180%

Index Agg. Contribution Margin

2004 2005 2006

Multibrand-Event

Astra GTC – Contribution Margin Case StudyAstra GTC – Contribution Margin Case Study• Design excellence, bold pricing and communications

– GTC Average Transaction Price is €21,200; €1,850 above 5-dr;€4,800 above predecessor 3-dr

– Strong conquest from Audi A3 as well as Golf and Focus

– Increased market share from 0.33% in 2004 to 0.42% in 2006

– Increased volume from 68,129 cars in 2004 to 88,279 cars in 2006

Multibrand-Event

2011Projection

Pressure From Premium & Value MarketsPressure From Premium & Value Markets

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

14%

67%

19%

19%

58%

23%

Premium2.8 Million units CY05

Mainstream8.6 Million units in CY05

Value3.2 Million units in CY05

21%

54%

25%

Western Europe Passenger Cars by Sub-Segment

Multibrand-Event

50%

60%

70%

80%

90%

100%

'95 '00 '05 '10

Western E. (16.9Million units CY05)

Central E. (2.2 Million units CY05)

Eastern E. (1.9 Million units CY05)

Eastward Sales Shift – Pressure on MarginsEastward Sales Shift – Pressure on Margins

Total European Industry, Share of Sales by Sub-RegionTotal European Industry, Share of Sales by Sub-Region

88%

6%

6%

77%

12%

11%

C + E Europe:

+11% pts ’95-’12

Multibrand-Event

Aggressively Pursuing Growth Opportunities in Russian MarketAggressively Pursuing Growth Opportunities in Russian Market

66,386,2

132,6

200

9%

6,60%

5,20%

4,20%

50

100

150

200

250

300

2004 2005 2006 2007 f/c

0,00%

2,00%

4,00%

6,00%

8,00%

10,00%

Volume k units Share

Multibrand-Event

Pro

fita

ble

R

eta

ilers

Str

on

g

Bra

nd

s

Sale

s

Eff

ecti

ven

ess

Aft

erm

ark

et

Pen

etr

ati

on

Lean

O

rgan

izati

on

GME Sales, Marketing and Aftersales Strategic Priorities

GME Sales, Marketing and Aftersales Strategic Priorities

MaximizeAggregate Contribution MarginGrow

Volume & Mkt ShareImprove

Cont. Margin per Unit Revenue Growth Improve

Contribution Margin per unit

Multibrand-Event

GME’s Multi-Brand StrategyGME’s Multi-Brand Strategy

Upper

Middle

Lower

SIGMA 2004

Social Status& Affluence

Traditional Modern Postmodern

ValueOrientatio

ns

Multibrand-Event

Why is socio-demographic data not enough to describe specific target customers?

Why is socio-demographic data not enough to describe specific target customers?Both these guys are approx. plus 50 years old, wear glasses, have a similar income, work in the same business and are born in New York!

But:

Do they read the same magazines?

Do they eat in the same restaurants?

Do they own the same cars?

Are they in the same target group?

Multibrand-Event

2. Brand Portfolio& Brand Positioning

3. Product Differentiation& Product Portfolios

1. Customers4. Brand SpecificMarketing Concepts

Positioning & Brand Values

Product Differentiation

Product Portfolio

Price

Distribution

Marketing / Communication

Brand Portfolio & Missions

Target CustomersDefinition

Fleet Business

Sponsorship / Promotion

Cross brand collaboration does not come naturally – clear framework and rules required

Cross brand collaboration does not come naturally – clear framework and rules required

Multibrand-Event

Example: Multi-Brand Pricing ApproachExample: Multi-Brand Pricing Approach• Balanced ‘Horizontal’ and ‘Vertical’ price positioning

• Price positioning defined vs. competitors and internal brands

Mercedes, BMW

SAAB

OPEL

CHEVROLET

CADILLAC

External Competitive

Situation vs. Target Competitors

External Competitive

Situation vs. Target Competitors

Volvo, Audi

VW, Ford, Peugeot, Toyota, Renault

Fiat, Hyundai, KIA, Citroën

Multibrand-Event

Multi-Brand Dealer Corporate IdentityMulti-Brand Dealer Corporate Identity

Exclusive

+ 9,000 European Sites involved Group Brand

Multibrand-Event

GME’s Multi-Brand StrategyGME’s Multi-Brand Strategy

Upper

Middle

Lower

SIGMA 2004

Social Status& Affluence

Traditional Modern Postmodern

ValueOrientatio

ns

Multibrand-Event

SummarySummary

• GM Europe turnaround progressing but not complete

• Positive sales momentum – first year above 2m units

• Revenue side of business has contributed 2/3 of recent turnaround progress

• Differentiated and complementary Multi-brand strategy

– Structured long-term approach

– Key ingredient for future success