Sign in to follow this  
Followers 0
NINETY EIGHT REGENCY

Cadillac Re-Launches in Europe With Downsized Ambitions

68 posts in this topic

Cadillac Re-Launches in Europe With Downsized Ambitions

By William Diem

WardsAuto.com, Mar 2, 2010 12:59 PM

Special Coverage

GENEVA – General Motors Co.’s Cadillac luxury arm aims at fewer buyers this time, its third attempt in the last decade to install itself in Europe.

“This is a new business case,” says Wolfgang Schubert, general manager of Cadillac Europe, a new, lean organization that will share space and back-office help either with Chevrolet Europe in Zurich or Adam Opel GmbH in Russelsheim.

The organization details should be finished by the end of May, Schubert says.

GM has learned from its past mistakes, the executive says, adding when Cadillac first tried to make itself a global brand a decade ago, it wasn’t focused.

Then importers such as Kroymans Group of Belgium told GM they could do a better job of selling cars, promising to deliver volumes of 25,000 a year (including Corvette).

But Kroymans never sold more than 3,000 vehicles annually, and last year it failed, with too much interest to pay and too few sales in a depressed market for luxury cars.

Cadillac also has watched and learned from Toyota Motor Corp.’s Lexus in Europe, which has slowly increased sales with a Europe-wide push, but is not considered successful except in the U.K.

“We don’t want to spend as much” as Lexus, says Schubert. “We have a new business case. We were always undercutting our targets and scaling down. Now, we will start with a low base, with a small lean group of dedicated people.”

Cadillac will be happy to reach 3,000 units in Europe in two or three years, he says. The brand will be positioned for individualists “who dare to be seen in a different way.”

Cadillac’s CTS-V draws critical praise, even in Europe.

Perhaps surprisingly, Schubert says, Cadillac buyers in Europe are not mainly Americans or embassies. When Americans move to Europe, they usually like to buy European cars, he says.

Kroymans had 160 dealers in Europe. When it went into bankruptcy last year, GM gave licenses to 100 dealers to keep them alive. However, the list will be cut in half again, says Schubert, to match the new low-volume goals of the brand and keep the dealers profitable.

Chevrolet will take over imports of Corvette in Europe, but most of the Kroymans-now-Cadillac dealers will continue to sell the sports car.

Chevrolet had a Corvette on its stand at the auto show here.

Schubert says marketing will depend largely on press coverage and direct marketing to customers. He noted that Auto Motor und Sport, a respected German auto enthusiast magazine, gave the Cadillac CTS-V a 4-star rating and compared it favorably to Mercedes and BMW competitors. The CTS-V tested is priced at E76,000 ($102,000).

In addition to the CTS sedan, sport wagon and coupe, Cadillac will import the Escalade in gasoline and hybrid version, and the SRX cross/utility vehicle. It has no plans to bring back a diesel engine in the lineup.

link:

http://wardsauto.com/ar/cadillac_europe_downsized_100302/

0

Share this post


Link to post
Share on other sites

3K/year is about what they sold in Europe in their peak IIRC, so it looks like a realistic target. It means, though, that GM has given up on having a sizeable presence in Europe's premium/luxury segment. Perhaps the Russians and the Chinese like Cadillacs more than Western Europeans and will drive the brand's volume growth in the future.

0

Share this post


Link to post
Share on other sites
Hopefully they do it with better product than the BLS (barf).

Yes, but the problem is that perception is very skewed, and I don't even mean skewed from a judgement point of view but in very plain and objective terms... to put it gently, people here don't give a damn about Cadillac, not even about the CTS which is, objectively, a very good car.

0

Share this post


Link to post
Share on other sites

3,000 is even hard to hit, Cadillac doesn't have the right product for Europe, and the biggest problem is they have no reputation over there. Mercedes and BMW are selling closer to 400,000 cars in Europe, if all Cadillac can muster is 3,000 it isn't even worth trying. Mercedes can take the S-class to 100+ different countries and sell it with no problem, most of Cadillac's products don't work outside North America.

0

Share this post


Link to post
Share on other sites

Hopefully they are just establishing a beachhead for when the ATS comes.

But will the ATS even be good enough? Or will it be a 3-series like car at 1-series pricing, and a wannabe. The Seville was once sent to Europe to establish a beachhead for the Sigma cars that followed 4-5 years later, and that didn't work out. I'd like to see Cadillac become the standard of the world again, I just don't see it happening.

0

Share this post


Link to post
Share on other sites

Don't start hating on the ATS before we even see the concept. All we know is that it's RWD and supposedly substantially lighter than the Sigma chassis.

0

Share this post


Link to post
Share on other sites

Don't start hating on the ATS before we even see the concept. All we know is that it's RWD and supposedly substantially lighter than the Sigma chassis.

I'm not hating on it, I hope it is good. But will GM really go as far as they have to, or will they hold back like usual. Plus there is an all new 3-series coming before the ATS hits dealers. And then, even if the ATS is equally good as the 2012 3-series, will Europeans buy it? They trust and respect BMW, they don't respect Cadillac. And no matter how good the ATS is, it is hard to get respect without a flagship.

0

Share this post


Link to post
Share on other sites

There is a new fire lit over at GM. We haven't seen anything yet that wasn't designed pre-bankruptcy.

Think of it this way. If the new Equinox, Lacrosse, SRX, are all this good (despite your objections over drive wheels, I'm talking quality here) and came from "Old GM" pre-bankruptcy, I am super excited to see what they have for us next. GM was just starting to get it's design mojo back when the global financial crisis hit.

0

Share this post


Link to post
Share on other sites
3,000 is even hard to hit

It is immaterial in terms of the weight of those 3K units in total European sales in the premium-luxury segment, but it is a realistic target.

0

Share this post


Link to post
Share on other sites

Quality and brand perception aside, the Cadillac line up is grossly unsuitable for the Western European market for the following reasons:-

  • Lack of a Compact Platform.
  • Lack of a Competitive Full Size Luxury Model.
  • Lack of a 4-cylinder offering
  • Lack of a diesel engines

Essentially, Cadillac is a one model brand (CTS) since the STS, DTS and Escalade are all either uncompetitive or undesirable. Compound that with a total absence of the types of engines Europeans most prefer (diesels and 4-potters) due to gas prices and regulatory penalties, and you have a brand that is doomed to a niche and a pretty small one at that.

To fix that, GM needs to do the following (in order of priority):-

  1. Introduce the ATS lineup ASAP.
  2. Include in the ATS lineup a 1.9 liter Inline-4 Turbodiesel (150hp / 236 lb-ft)
  3. Include in the CTS lineup a 2.9 liter V-6 Turbodiesel (250hp / 406 lb-ft)
  4. Introduce a viable replacement for the STS.

If GM does that, I believe that they can do a whole lot better than 3000 cars/year.

#1 thru #3 should be a given unless someone at GM is completely boneheaded since the ATS is already underway and both turbodiesels are existing GM engines.

0

Share this post


Link to post
Share on other sites

A FWD, 5000 coupe with an 8.2L engine is out of place in Europe, but Cadillac is not selling that.

Are there no gas-engined sales of bmw & mb in Europe?

And is not Cadillac merely unknown in Europe (tho there is a considerable vintage Cadillac following).... at one point BMW was unknown & had zero reputation in the U.S., it took the mighty BMW / MB 30-some years to earn respect & volume here - people seem to expect Cadillac to do it in 3 or 4 in Europe.

I am perfectly fine with whatever profitable volume Cadillacs sell at in Europe, and am perfectly fine with an incremental increase in sales over long periods of time, just as bmw & mb did in the U.S..

Edited by balthazar
0

Share this post


Link to post
Share on other sites

There are zero gas-engined BMW & mercedes sales in Europe ?

Diesels are something like 65% of the market over there. Cadillac is already perceived as damaged goods. Why contribute to that with the "they don't even offer a diesel" meme. Cadillac will probably sell all 3,000 cars a year.... but yay for setting their goal low... it's the only way to reach it without a diesel.

0

Share this post


Link to post
Share on other sites

OK- so 35% of the Euro market favors a gas engine.

Cadillac should not have an offering there - esp in light of the low volume goals ?

Do Euro diesel buyers feel gas-engined variants of their cars are 'damaged goods' ?

Look- I'm not against a good TD Cadillac engine, there or here, but to wait out sales in EU JUST BECAUSE there is none at the moment doesn't make sound business sense, IMO.

I would not imagine EU consumers leapfrog from gas-diesel, so those gas-engine buyers should benefit from Cadillac's competition there, no? Would not more competition only make the EU cars better over there ?

Edited by balthazar
0

Share this post


Link to post
Share on other sites

I"m not advocating that Cadillac wait at all. They have TD engines available. Why not use them from the get go?

0

Share this post


Link to post
Share on other sites

I would have to believe there's a serious cost disadvantage to engineering the installation vs. expected volume.

Get Cadillacs back in circulation there ASAP- the diesel can be good press if/when it was released.

0

Share this post


Link to post
Share on other sites

At that point, it becomes a chicken/egg scenario. Can't get decent sales because no diesel offering v. waiting for decent sales before offering the diesel.

Apparently, the 2.9 liter diesel was engineered from the get go to work in the CTS. Most of that work is done already.

0

Share this post


Link to post
Share on other sites

Not trying to be obstinate here, but with a projection of 3000 and with your figure of 35% of EU sales being gas- go ahead and make a dedicated break into the gas-engined sports sedan market with the excellent CTS. Diesels are another segment.

Again- there is not going to be a negative association from the consumer pool who favors gas engines in EU. If it was 90/10, I would STILL advocate selling the gas CTS there in light of the paltry volume goal.

I am not up on the 2.9L TD (it is a TD, correct?)- if it was engineered to fit the CTS, get the current one there right now, and debut the CTS-TD in the fall.

There HAS to be some documentation WRT diesel buyers being loyal to diesels- thusly supporting my contention there's little crossover there.

0

Share this post


Link to post
Share on other sites

I think 57% of BMWs sold in Europe are diesel, near 65% diesel seems about right for the market as a whole, since many lower priced cars there are diesel. Cadillac has zero chance without a diesel, the 2.8 CTS gets 25.7 mpg (EU cycle) while the equally powerful 525d gets 45.6 mpg. The 3.6 CTS also gets 25 mpg, but cars like the 535d put out 282 hp and 428 lb-ft while getting 42 mpg. The CTS needs to not lose any performance, but add 15 mpg to be competitive. Plus the emissions tax is higher on a V6 CTS is in the 35% bracket, the maximum in England.

Cadillac can't compete with BMW and Mercedes in the USA, how will they manage to do it in Germany? GM doesn't have the money Cadillac would need to develop cars to compete over there.

0

Share this post


Link to post
Share on other sites

>>"Cadillac has zero chance without a diesel"<<

Nonsense. No one buys a BMW gas-engined car JUST BECAUSE they ALSO offer a diesel. They buy one or the other, because one or the other appeals to their needs/wants. It's no different than buying a Suburban because Chevrolet sells the Corvette- doesn't happen. The implication there is that everyone who buys a gas BMW ALSO buys a diesel one. :wacko: I don't think so.

THIRTY-FIVE PERCENT of the EU market is gas. That a major, monster chunk.

0

Share this post


Link to post
Share on other sites

35% is a lot less than majority. If Cadillac wants to get sales they should offer the engine choice that nearly 2 out of 3 European customers purchase.

0

Share this post


Link to post
Share on other sites

>>"Cadillac has zero chance without a diesel"<<

Nonsense. No one buys a BMW gas-engined car JUST BECAUSE they ALSO offer a diesel. They buy one or the other, because one or the other appeals to their needs/wants. It's no different than buying a Suburban because Chevrolet sells the Corvette- doesn't happen. The implication there is that everyone who buys a gas BMW ALSO buys a diesel one. :wacko: I don't think so.

THIRTY-FIVE PERCENT of the EU market is gas. That a major, monster chunk.

I am just saying without a diesel Cadillac has automatically turned off nearly 2 out of 3 car buyers in Europe. It is more like the Camaro offering only a V6, while the Mustang and Challenger have V8s also. You can't offer just one engine, it limits how many people you can draw in.

Cadillac has to go over there with something, no one takes them seriously over there.

0

Share this post


Link to post
Share on other sites

In most circles, except some high performance car people, gasoline is seen as "not as good" as diesel.

edit: again, Cadillac needs to re-enter with the diesel in hand. If that means delaying the re-entry, then so be it. They could probably use the time to rebuild their dealer network anyway.

The 2.9 liter diesel is a very versatile engine. It was designed to work in the RWD CTS and the FWD Opels and Saabs. There was talk for about 1/2 a second of putting it in the small trucks here in the U.S., but that would have made too much sense for GM to handle..... but with 250hp and 403 ft/lbs of torque @ 2000rpm, it could have even gone in the Silverado/Sierra 1500 as a Babymax, with the proposed 4.5 liter V8 diesel as the "MiddleMax".

0

Share this post


Link to post
Share on other sites

Your content will need to be approved by a moderator

Guest
You are commenting as a guest. If you have an account, please sign in.
Reply to this topic...

×   You have pasted content with formatting.   Remove formatting

×   Your link has been automatically embedded.   Display as a link instead

Loading...
Sign in to follow this  
Followers 0



  • Who's Online (See full list)

    There are no registered users currently online

  • Who's Chatting

    There are no users currently in the chat room