Pickups, SUVs Lead GM’s Charge in ASEAN Region

BANGKOK – The General Motors strategy placing a product focus on utility vehicles and trucks in many ASEAN markets continues to unfold.

WardsAuto recently had the chance to talk planning with Mike Devereux, vice president-sales, marketing and aftersales for GM International, at the 37^th Bangkok International Motor Show, where the automaker presented the Colorado Extreme and Trailblazer Premier concepts, plus launched the new ’16 Captiva. An edited transcript follows.

WardsAuto: In Thailand and the wider region, including India, you have changed your strategy, particularly with a core focus on two midsize truck/SUV models. Is this working out for you?

Devereux: Seventy percent of our sales (in the ASEAN region) are Colorados and Trailblazers, so as we focus our investments, whether in Thailand or around the region or in India, our goal is to do a couple of things. First of all, we need to have a sustainable, profitable business that we can grow, and when we say sustainable and profitable those two things are intertwined.

We want to be able to make sure that when we deploy capital that we see a return on that capital, no matter where we are spending money. Our approach in India is very focused. We’ve got a future growth portfolio in India, about a billion dollars of investment, and our focus in this market is on trucks and SUVs for the very reason that, first of all, its seven- or eight-tenths of our sales in any given month and it’s what we’re known for and what we’re going to focus on going forward.

WardsAuto: The Philippines has a unique dynamic. What is your strategy for this market?

Devereux: We sell the Colorado, Trailblazer, we just launched the new Trax (imported from Korea), we sell Suburbans from the U.S. and we have sold Cruze there in the past. It’s a left-hand-drive market, so it gives us a little bit of a different footprint to bring in vehicles. A lot of free-trade deals are being cut between the Philippines and different places, so non-tariff barriers are quite low.

WardsAuto: How does this compare to your broader ASEAN strategy?

Devereux: When you look at building and selling in ASEAN, outside of the Philippines, unless you are making those vehicles in the country, it’s very difficult to bring imported vehicles into any of those countries because of the non-tariff barriers. So in this market we are going to build these vehicles, we build the engines here, the 2.5L and 2.8L engines that we also export to the U.S. and put in the Colorado there. So our business going forward in Thailand is going to be a focused business, a sustainable business. Then in the other ASEAN markets we will take a different approach with a different portfolio that will include Colorados and Trailblazers. But because of the market dynamics in Vietnam or Indonesia, we will probably have a bit broader portfolio.

Small CUVs Hot

WardsAuto: The compact CUV/SUV market is growing fast in Thailand. Do you see this as an area that can be explored to complement your midsize truck/SUV focus?

Devereux: “We have the Captiva that we have just refreshed for this year, the first SUV in Thailand to offer Apple CarPlay, which is a great feature. So we have a C-SUV that’s smaller, (and) we will be pushing that. We will be looking at our options in the future for smaller-than-Trailblazer types of (vehicles), but there will be focus on trucks and SUVs.

WardsAuto: What about small CUV/SUV vehicles? The Indian-built Adra show car was very well received by the local media a couple of years ago. Could small CUVs provide you with a new direction in this region?

Devereux: We announced at the Delhi Motor Show (in February) that we have a couple of vehicles we’re considering. We showed an A-(segment) notchback called the Essentia (a sedan version of the new Beat [Spark in other markets]) that will go into production in 2017. We showed a “soft-roader” called the Beat ACTIV, which we are considering for production. And we announced last summer, on a visit our CEO made to India, a billion-dollar investment in future launches further out into the end of the decade that will involve a couple of vehicles. We haven’t announced what those vehicles are. The Adra was a concept only.

WardsAuto: You recently made a very high-profile decision to pull out of assembly in Indonesia. How has that affected your operations there and what is your strategy now for this market going forward?

Devereux: It was a focused decision that we said we couldn’t have the scale we need in Indonesia to have a plant to be sustainably profitable in that country so we wanted to go to a different model, that’s an NSC (national sales company). So we’ve just opened a new office in Central Jakarta. We have about 45 people there, we have about 38 dealers, dealers that are investing in new facilities, and we continue to look at new openings. We just launched the Trax this year in Indonesia. So we’ve gone from being a local manufacturer to being an actual sales company, and we would like to introduce new vehicles in Indonesia.

There are some differences now in tariffs between Indonesia and Korea; tariffs that are changing, they’re coming down. We still have some concerns about non-tariff barriers, but our plan is to continue to look around at different vehicles we can bring into the region, not necessarily just ASEAN made, to flesh out our portfolio in Indonesia.

With about 35 to 40 dealers, a sustainably profitable operation and an alternative to the Japanese brands, which obviously dominate Indonesia, we think there is a niche for a cool, hip American Chevrolet brand for Indonesian customers. We have a lot of car clubs in Indonesia; there are a lot of people that want something different. We’re never going to be doing massive volumes in Indonesia with Chevrolet, but we think we can have some very good business, take care of our customers. And if you look into the future, obviously Wuling, our joint venture in China, is coming into Indonesia in a big way in the next couple of years, and through our shareholding in that it will be our local presence in terms of manufacturing in Indonesia.

Strategies for Smaller Markets

WardsAuto: What about the smaller ASEAN markets?

Devereux: Outside of Vietnam, where we have a plant and a national sales company, and Indonesia, where we have a national sales company, and in Thailand, where we have a plant and a national sales company, everywhere else in the region we have an approach that involves us selling to a distributor that handles the market for us.

For example, in the Philippines (there are) 24 dealers and our distributor is the importer. They sell to their sub-dealer network, they handle the marketing, the warranties and all that stuff. So also in Laos and Cambodia. And we have just opened in Myanmar, which is a new market for us. In Singapore and in Malaysia we have a distributor approach in each one of those markets.

WardsAuto: The niche ASEAN markets give you the opportunity to have a wider model portfolio and offer more depth to customers?

Devereux: In Laos we have a broader portfolio than we have in a place like Thailand. And again, that all stems from the way in which the ASEAN OEM markets protect the markets. So there are duties, and in places like Laos, where there is no indigenous manufacturing, you are able to import vehicles quite freely. If there are vehicles made in these countries, excise taxes tend to be quite high, particularly on the things that are made in that country. But in places like in Laos, Cambodia and Myanmar, you are going to see a wider portfolio as it’s a little bit more free.

WardsAuto: The main thrust seems to be trucks, where the Japanese OEMs have a strong footprint here. How can you build up your market share now that you are basically relying on the midsize truck segment for growth?

Devereux: We want to pump up the American heritage. We know how to do trucks, we have been doing them a long time. In 2018 it’s the 100^th anniversary of Chevrolet trucks, that’s just 18 months from now, we know how to do trucks, we know how to do accessories.

We want to be an alternative to the dominant Toyota and Isuzu brands. They’re great competitors; we’re not trying to outsell them. What we want to be is a brand that’s known for taking care of its customers. We don’t spend a lot of time talking about it, but we spend a lot of time with our dealers making sure we take care of people, that we’re a hip alternative that builds on the American heritage.

There are hundreds of classic trucks in Thailand from the ʼ50s, ʼ60s and ʼ70s. They write songs about Chevrolets, so we want people to make their own expression of their vehicle. On the show truck (Colorado Extreme), we have explored accessories, and if people like , those types of things, we can make them available so people might be able to create their own show truck in the showroom. That’s kind of what we are exploring here with (design head) Mike Simcoe and the team. I think they did a great job. I love the color. I like the matte finish on the vehicle, but it’s an exploration of our heritage, the Americanism, the ruggedness or our brand, and to try to juxtapose that against some of the Japanese brands but in a very different place.

WardsAuto: After your high-profile weeding out of most car models here and canceling your participation in the Eco Car 2 program, you launched the Colorado’s upscale ‘High Country’ version that takes you into the fast growing luxury-pickup segment. How is this model working for you?

Devereux: We are very happy, but I want to sell far more of them. I think you will see that’s where we want to take the brand, a little more upscale in terms of contenting and price points, because we’re never going to out “Isuzu” Isuzu or out “Toyota” Toyota. That’s not what we are trying to do. We want to be seen as that hip, cool, American, tough alternative, and that’s where you will see us going. High Country is definitely the type of truck we want people to know us for, so you will see us pushing that even more.

WardsAuto: Building on that angle, the Colorado Extreme is a showcase in customization. Will you be transferring these concepts, which would clearly improve vehicle margins and create a halo effect, into the showrooms?

Devereux: Over time you will see the Chevy brand become even more expressive. Thais love to customize vehicles. You drive around Bangkok, you see all sorts of customization. But we really want to push accessories going forward. We don’t usually do it on a show vehicle so it’s an interesting test. We will have a lot of consumers here, it’s a selling show, so we will have a lot of feedback from customers on these show vehicles, and we will make some decisions on whether we want to put these on production vehicles.