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Manignom President and CEO Souksamone Sihathep says the Laos car market is small but growing rapidly, noting his dealer group sees “a trend of more people buying new cars in what used to be a predominantly used-car market.”
$40 million state-of-art dealership sets benchmark for GM in Asia-Pacific region.
Building Chevy Brand Recognition
Chevrolet doesn’t have wide recognition here, he notes and there is a need to make up ground. The push started early in 2012, as Manignom rolled out a campaign to develop awareness ahead of the dealership launch.
“We used the 100-years Chevy logo on newspapers and major billboards around the Vientiane capital and major provinces on a daily basis for six months in advance before we began to operate sales,” Kongwatthanasupa says.
With the dealership’s summer soft launch, the marketing strategy ratcheted up. “We changed all artwork for product advertising (and) launched a (car-loan) campaign with low interest rates and low down payment.”
Manignom also organized “a road show and display of our cars at prime areas around the Vientiane capital on a weekly basis” and offered opportunities to win cars in contests, sponsoring key music awards and recruiting Miss Laos as a brand ambassador.
Manignom continues pushing ahead so that sales start balancing out its investments, with plans to open a second showroom this year. In the 2014-2015 period, three more dealerships will open in the north. There also will be a satellite showroom in the capital city, all of which will provide the group with broad footprint in the major population centers.
The Laos market is expected to grow fast, and Manignom has its eye on the long term when it reaches a tipping point where complete-knocked-down kits becomes viable. The plan is to expand its Chevrolet business here and it is mulling market size, investment and tax incentives.
With CKD and semi-knocked-down kits in mind, Manignom already has acquired a significant plot of land with a long-term lease for a future plant.
GM has an aggressive growth strategy of its own for the ASEAN region that includes both the more-established car markets as well as the new frontiers such as Laos and Cambodia.
“In terms of population and total auto-market size, Cambodia is larger than Laos,” Jaising says. “However, almost 90% of the total car sales there are used cars. We see good potential for new-car growth.”
To date, GM has invested a total of $2 billion in manufacturing facilities in ASEAN, particularly in Thailand and Indonesia.
In September 2011, the auto maker opened a new $200 million state-of-the-art powertrain facility, adjacent to its manufacturing facility in Rayong province, Thailand, marking its most significant investment in the region in more than a decade, and its first engine plant.
“We are working towards maximizing our plan to build where we sell and source where we build in ASEAN, as we continue to develop and stabilize availability of local suppliers to support ASEAN and GM’s global supplier footprint,” Jaising says.
“In 2012, Chevrolet had a slew of new product launches in the region starting with the Colorado, followed by the Sonic notchback and hatchback variants and the Trailblazer. We can barely keep up with the demand, and that is why we are expanding existing manufacturing facilities and adding new dealerships from Vientiane all the way to Jakarta.”
GM is expanding its dealer network in Thailand to 120 dealers by end of this year, he says. “Similarly, we are expanding our presence in Indonesia and hope to reach 55 Chevrolet dealers by the end of 2013.”