AN Comment: Cadillac Should Pull Out Of Europe; 07 Sales In 28 Countries Just 3K

[Perian]

Link: http://www.autonews.com/article/2008...aign_id=alerts


Luca Ciferri - Automotive News - July 15, 2008


Times are changing and smart carmakers need to adapt.

A quick change of course for General Motors could be to pull Cadillac from Europe and concentrate on Russia.

Russians like Caddies. Judging by sales numbers, western Europeans don't.

Cadillac sales in Russia grew 106 percent in the January-April period to 537 units, after jumping 156 percent to 1,485 units in 2007, according to figures from the Association of European Businesses in the Russian Federation.

For those who buy a Cadillac in Russia, soaring fuel prices are not a worry yet. There is no pending CO2-based legislation and taxation.

This is not true for the rest of Europe.

In 2007, just 3,032 Cadillacs were sold in the 28 countries for which researcher Jato Dynamics compiles statistics. That was just 78 more than the year before.

This year, things improved a bit: from January to April, Cadillac sales in Europe grew 4.6 percent into a flat market. But, in real numbers, progress was minimal. In the first four months of the year, Cadillac sold 1,165 units, or 46 more than a year earlier.

Cadillac never had an easy life in Europe, where it has had to face Audi, BMW and Mercedes-Benz, the world's largest and strongest premium brands, on their home turf.

The idea to grow in Europe with a product especially designed and built here did not work either.

The uninspiring BLS sells just a fraction of what Cadillac had hoped for.

While the BLS reaps no benefit from the weak dollar, the bigger U.S.-built Cadillacs also aren't faring well. High fuel prices and the increasing adoption of CO2-based taxation are pushing European buyers away from thirsty large cars and SUVs.

Europe simply doesn't seem interested in Caddies.

So, as GM reviews its global brand strategy, the decision to pull Cadillac from western Europe and focus on Russia might be an easy one.

[Perian]

I can't even imagine the fixed costs of selling 3,000 units spread over 28 countries. Do we need Saab and Cadillac in Europe, or was Cadillac introduced there to hedge against the potential shut down of Saab?

[CobaltSScrazy]

thats what happens when you "HALF-A**" a product offensive, disorganized global marketing, non-specific unique dealership sales environments, and have a prominent history of pink boat fins with no presence recently even though you have a 550 S/C CTS-V with recaro racing seats that is faster than the M5 around nurburgring and you do not advertise the HE11 out of it!

The lack of RHD, the lack of diseal's, the lack of manual options...all hurt Cadillac (and GM in turn).

I'll put it to you this way as a Senior at U-M. It'd be like (*THIS DID NOT HAPPEN BUT IF*** IT DID) me studying 2 years ago for Anatomy/Phisiology or Pharmacology or Pathophisiology final exams worth over 30% of my grade oh the night before I had to take them (mind you I took Patho/Pharm at the same time) and only studied for the one night before.........can you spell




Anyone who isn't a genius or has a photographic memory would not be successful. Same applies to Cadillac

CobaltSS

[Quickening]

Get Cadillac out of there until its truly ready. You have a well respected brand Saab that is premium and Europeans like that would buy if they had fresh product. Plus it just gets messy when you have Chevrolet, Opel (thats apparently moving "upmarket", Saab and Cadillac.

[nadepalma]

Anyone know what the breakdown is? Is the BLS the majority of those sales?

I say give them the chance to get the new CTS - and all its variants - up and running in Europe. Also get the BLS/BTS replacement a chance to arrive on the Continent. I also think that once they have diesels running in Europe this will help as well. They dont have any diesels outside of the 1.9L I4 in the BLS and that no doubt hurts them in a market that is over 50% diesel.

We've also read rumors of an "ATS/ALS/ATX" product that could be based on the next Astra/9-1 as well. This would be a Europe-only (and perhaps China only) product and compete with the likes of the next gen Alfa 147, Audi A3, etc. Many have clamoured that GM needs such a product to fully fit into the market and compete with the established players. They may have a valid point and GM should invest in this segment.

If GM gives those two core products (and an "ATS/ALS/ATX" product) a real go, and they still don't catch on, then I say pull out of the market and concentrate on Eastern Europe. Perhaps if they concentrate on Eastern Europe and Russia, and other markets like China and India, it may "spill over" into Western Europe eventually. Or, if GM pulls out of Western Europe, perhaps they could return at a later date with even more impressive products? Who knows.

But til then, I say stay the course. It won't happen over night. GM will NEVER control huge swaths of this market, but at the very least they should aim for a modest toe-hold if they can make the new products convincing enough.

[Sal Collaziano]

Let's see how the best Cadillac in years (the CTS) fares in Europe before deciding to forget about it...

[BigThreeForever]

During my time in the UK, I have only ever seen three modern-era Cadillacs on the road.

One was a BLS with dealer demonstrator license plates. One was a CTS registered to a Swiss diplomat in Mayfair and the final model, a 1999 or 2000 Seville STS, belonged to an American expatriate from Chicago who loved his Caddies . . .

A dealership network that barely exists . . . products which simply aren't EVER advertised . . . and a name unknown to most Europeans (except in a 1950s Elvis sort of folk memory) and you have the recipe for oblivion.

Also, this is the land of BMW-Mercedes-Audi. Even the mighty Lexus struggles here.

[RCDonner]

This would be typically GM. If there is a problem go out of the way of it instead of analyzing it to solve it. If they would pull away Cadillac from Europe they will never ever become a global brand.
As I stated a thousand times at GMI. They failed because they don´t have an appropriate dealer network, no advertising and Prices are much too high. At a first view they seem to have a lower price than comparable Mercedes, BMW, Audi but the resale value is so low that overall they are even more expensive. Why should people buy a Cadillac in Europe ? It´s not so much more "fun to drive" or "must have" than the well known brands but they cost a lot more (incl. resal value). Everybody here (especially in Germany) wants to make a bargain deal. So if they know they can drive luxury for much less than they would buy (if they know Cadillac exists because the lack of advertising). With the low dollar rate I wonder that GM doesn´t push its american car sales in europe. Just image how much problems the Europeans have to sell cars in America with that dollar rate. But they sell and earn money with it. GM is so stupid not to use this opportunity as they should.

[HoosierRon]

Option B: give the Western Europeans what they want -- diesels, high quality interiors, smaller displacement engines and A and B class cars.

[rueben44]

Why get out that is silly. You haven't released any of the CTS variants. You haven’t released the diesel option in the CTS yet it is still coming. You haven’t released the any other products except two that are geared towards that market and you have at least increased sales even if it is by a small margin. The CTS is the product it needs to be just release a fuller portfolio why scrap 3K of sales that are probable higher in profit than US sales because of the weak dollar. Silly!

[Buick61]

Originally Posted by Perian

I can't even imagine the fixed costs of selling 3,000 units spread over 28 countries. Do we need Saab and Cadillac in Europe, or was Cadillac introduced there to hedge against the potential shut down of Saab?

What costs? I doubt there are any stand alone Cadillac dealerships anywhere on that Continent. Most are joined with Corvette and Hummer.

Here's a shot of a Cadillac dealer that I took while Honeymooning in Paris:



They're grouped with Chevy (though I only saw Cadillacs in the building).

I'm sure there is only minimal costs tied up with selling Cadillacs in Europe, and most of those are probably brochures and spare parts.

[AMERICA 123]

Don't have time for all the rest - here is a start.

http://media.gm.com/servlet/GatewayS...37&docid=46918

Total Europe

Total Vehicle Market

....................Total 2006.....Total 2007.....Jan-Jun 2007.....Jan-Jun 2008.... Variance.... %.....Difference..Jun 2007.......Jun 2008.....Variance.... % Difference

Total Market...21'894'809......23'130'031......11'852'31 8.........12'227'499.......375'181....3.2%........ .......2'170'726........2'118'877.....-51'849............-2.4%

GM Group........2'002'998.......2'181'889........1'12 9'322............1'160'935........31'613....2.8%.. ...............214'574..........202'869......-11'705............-5.5%

Market Share.........9.1%............. 9.4%............. 9.5%................ 9.5%................0.0.....-0.4%.....................9.9%.............9.6%.... .......-0.3............-3.1%

Cadillac.................3'448.............4'782.. ...........2'369.................2'595............ ..226......9.5%.......................452......... .......365............-87...........-19.2%

Corvette.............1'275 1'278 801 655 -146 -18.2% 136 97 -39 -28.7%

Saab.................90'551 85'129 45'300 39'418 -5'882 -13.0% 8'150 6'942 -1'208 -14.8%

Hummer...............1'962 2'322 1'026 1'325 299 29.1% 173 153 -20 -11.6%

Opel/Vauxhall...1'563'125 1'630'070 862'798 848'308 -14'490 -1.7% 166'614 149'497 -17'117 -10.3%



Chevrolet...342'369...457'951...216'882...268'212. ..51'330...23.7%...39'019...45'790...6'771...17.4%

[YupYupYup]

This is a knee-jerk reaction by a bunch of journalist bozos who do not want Cadillac to succeed in Europe. Funny how they never provided this sort of "advice" when Cadillac had really bad product. But now with the new CTS and various upcoming models that will follow the CTS success, they do not want Caddy in Europe. Simply put, they will make great competition (once they get their marketing and distribution act together) for BMW and Mercedes, as well as many others. Cadillac has already shamed the Euro brands in various racing series (CTS-R, anyone?) and even BMW execs have been on record as saying Cadillac poses a threat to them.

Focusing on Russia, as AN so gladly advised , would just give AN more fodder for the fire...They would denounce Cadillac as a gangster (Russia, anyone?) brand that lacks any sort of sophistication for the more "educated" among us. They would complain how Cadillac is not in Europe where the real compeition is, maybe even laughing their exit out of the market.

Cadillac MUST be in Europe, whether AN likes it or not.

[markform]

I agree. The only reason Cadillac is 'sold' in Europe has nothing to do with international demand. Rather, it is a marketing ploy to create an illusion that Cadillac competes with luxury cars.

But resale figures tell a different story. A new STS costs about the same as a 5 Series, E class or Lexus GS. But 3 years later, this 2005 STS sells for about the same as a 2005 Honda Accord. And if you go back to model year 2000, the Caddy brings LESS than the Accord. Yikes!

Cadillac is a joke luxury car.

If anybody on this board could choose to own a luxury car dealership free & clear, my bet is that Cadillac would be at or near the bottom of the list.

[ghughes]

"We've also read rumors of an "ATS/ALS/ATX" product that could be based on the next Astra/9-1 as well. This would be a Europe-only (and perhaps China only) product and compete with the likes of the next gen Alfa 147, Audi A3, etc. Many have clamoured that GM needs such a product to fully fit into the market and compete with the established players. They may have a valid point and GM should invest in this segment." YEAH, and this is stupid as I have been saying. One argument of proponents for the mini-me cadillac is that it will make us really competitive in the euro-zone, righhhhhht.