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Customer LoginsHow quickly should an OEM phase a vehicle out?
I always think about the title of this post – how quickly should an OEM phase a vehicle out? – when I analyze Chevrolet’s numbers in Brazil, the second market for the brand just behind the US.
Before I get to the figures, let me give you a quick background. Traditionally, Chevrolet had sold rebadged Opel models in Brazil: Monza, Corsa, Zafira, Meriva, Astra, Vectra. During GM's Chapter 11 time, no investments were made in Brazil, which got Detroit's approval of using local revenue to develop products down there. So all Opel vehicles were terminated and replaced by new projects created in São Caetano do Sul.
One of the new vehicles is the Onix, which has had a very good 2013. Launched last year during the São Paulo Auto Show, 106,534 units were registered until September 2013. Polk, now IHS Automotive, forecasts that registrations will reach 124,029 units by the end of the year.
GM has clearly stated that it wanted the Onix to be its best seller in Brazil. In other words, it would take the sales crown from the Celta, a hatchback launched in 2000. Both are made in the same plant, in Gravataí which is in the southern part of the country. The Celta introduced several concepts to the Brazilian market: it was the first vehicle to have destination charges included in the MSRP, for example. Its peak year was in 2011, when 155, 669 units were sold.
There has been only minor facelifts in its life, so it would be natural that customers would choose an Onix when at the dealer network. With that migration, Celta's registrations are down 45% through September, to 57,504 units from 2012's 104,335.
The problem is that the Onix is replacing two vehicles, not only the Celta, but also the Corsa which was terminated last year. The Onix also hurt registrations of the Agile, another hatchback of similar dimensions. In the chart below, you can compare registration numbers of all Chevrolet hatchbacks in Brazil.
In a total market anticipated to shrink 0.7%, Chevrolet is doing fine this year and likely to grow 2.4%. But it is challenging to believe that going forward, the Onix will be able to attract all Celta and Corsa buyers. We anticipate that a new Celta would come to market only in 2017, possibly a project developed with PSA Peugeot Citroën.
So these thoughts lead again to this post’s title. Is GM phasing the Celta out too fast? Possibly yes. The Onix – and all new products launched in the last two years – will not be the new product in the market as it is today for long, and Chevrolet numbers can fall quickly.
Augusto Amorim, Lead Analyst – South America Forecasting, IHS Automotive
Posted 15 December 2013