Cadillac Treats Chinese Shoppers as VIP's; Sales up 62%

[Ming]

Cadillac Floors It in China
To coax drivers from their BMWs and Audis, GM is treating shoppers like VIPs
by Dexter Roberts
May 24, 2007
Business Week



The Cadillac charm offensive in China starts at the front door. In the companys 39 mainland dealerships, showroom attendants greet visitors by the polished-glass entrance, cigars and Napa Valley wines are on offer at a black-marble bar, and VIP rooms with leather sofas provide a comfortable venue for dealmaking. There's even an exhibit of the brand's 105-year history—with a movie and details on features such as hand-stitched leather seats and authentic wood trim—to show off Caddy's pedigree. "Everything gave me the feeling I was a VIP,'" says Hu Ming, a 44-year-old entrepreneur from Shanghai, who in February plunked down nearly $65,000 for a silver-gray Cadillac SLS. "The décor is very different from other brands'. The place has an American style."



Cadillac is counting on its brash brand of American luxury to differentiate itself from the pack. Caddy's parent, General Motors Corp. (GM), has done well in China with Buick and Chevrolet, but it has lagged at the high end. While Audi, BMW, and Mercedes (DCX) have been in Chinese showrooms for a decade or more, Cadillac arrived just three years ago. The European trio controls 77% of luxury-car sales in the mainland. And Cadillac? Just 2.7%.

Now, Caddy is revving up its marketing engine to narrow the gap. It has more than doubled the number of showrooms on the mainland in the past year. And it offers five models in China, ranging from the $46,000-plus CTS sedan to the $140,000 Escalade SUV and the $160,000 XLR convertible roadster. (Sticker prices run higher than in the U.S. because China slaps a 25% tariff on imported cars.) Cadillac got buzz when it delivered a pink CTS to Mary Kay Inc.'s top salesperson in China. It also ferried VIPs to a boat show in Shanghai and an exhibition of American art in Beijing.

Then in February, Cadillac introduced a China-designed and -built version of its SLS sedan. The car is four inches longer than the U.S. model, a nod to Chinese customers, who like a roomy backseat since they tend to have chauffeurs. The model powered a 62% jump in Cadillac's mainland sales in the first quarter, compared with a 19% increase for all of 2006. "We are putting everything in place," says Karen Rafferty, Cadillac brand director for China. "Building a brand is certainly not a sprint."

Source: http://www.businessweek.com/globalbi...ge_top+stories

[CheetahDC]

I hope General Motors takes some lessons from this and apply it to the US market. It would lessen the perception of dealerships as being run by sleazy bums.

[Ming]

Go here: http://www.cadillac.com.cn/gallery.asp?model=sls

Then Click on the button in the red circles corresponding to my screenshot here (and the "TVC" below it has several commercial videos):



Then compare: http://stadium.weblogsinc.com/autobl...lac_sls_21.jpg

You'll see why some people were disappointed with Bob Lutz's response about the SLS wheelbase being the issue with "bringing it over", when the driver's area / dash itself would seem a place where the STS could improve and pull trim bits or whole panels from the SLS, regardless of wheelbase (subjective, I suppose some people might prefer the STS interior).

[fp115]

If only they were allowed doing those things in North America. Especially here in most place in Canada where smoking indoors is illegal.

[goblue]

I just don't get it - how is it possible that in China they smoke cigars and sip american wine in opulence while in the US they sit on a $5 chair sitting on a stained rug looking across a dirty metal desk with peeling paint at some salesman in a ratty suit.

If this keeps up, all Cadillacs will be designed, built, and imported from China - its crystal clear from recent models - from design to the sale - that Cadillac China understands not only the chinese buyer, but the american as well. Unbelievable!

[CheetahDC]

That is a much nicer interior than the American STS, although I'm not sure how an extended length version will play in the states. I wonder how the '08 CTS interior compares with the SLS's. Isn't the STS kind of redundant now? Drop the STS, redo the DTS, and maybe redo the BLS. Isn't that in their plans anyway?

[Tellurium132]

So from what Ive been seeing it looks like GM abandoned the US market because they werent making enough money and went to China because they have more population. They know they've got better market dominace, and so they can treat it with more development more resources and a more open mind towards customers with giving them what they want.

[Ming]

Originally Posted by goblue

I just don't get it - how is it possible that in China they smoke cigars and sip american wine in opulence while in the US they sit on a $5 chair sitting on a stained rug looking across a dirty metal desk with peeling paint at some salesman in a ratty suit.

I think one of the problems here is that Cadillac is so closely tied to the other GM brands in the minds of consumers in the U.S. that they go to a Caddy dealer expecting the same wheeling, dealing and heavy discounts that they would get from a Chevrolet dealer. And they can get those deals, depending on the car and the time of year.

By contrast, I'm doubting that the Chinese Cadillac dealers have Red Tag Sales and other blowouts. That kind of thing would strip the air of exclusivity from the brand and cut deep into the profits of dealers --- Profits re-invested into gorgeous showrooms and a clean, attractive, well-compensated and friendly staff and shiny service center with techs in jumpsuits that look like they came out of 1950's America.

To put it simply, my assessment is that Chinese Cadillac customers are looking for a buying experience, while U.S. Cadillac customers are looking for a "deal". Of course, its a vicous circle, because of the existing dealers like the ones you mention, who would expect anything more than a "deal" out of that kind of environment?

I've spoken with a co-worker who owns a Lexus, and his experience was more like the Chinese Cadillac customers'.

[HoeyHimself]

I am just curious...why does China get a better GM then America? Sure they dont have everything we have that GM has to offer..but why oh why do we get the shaft? ya wanna know why?? Because Toyota and Honda are getting the American dollars that could otherwise be going to the American manufacturers that would then have more money to spend on making the customers happy rather then figuring out ways to axe employees and cut corners.

[killfort]

It's not only that China gets a better GM, China gets a better America. They are becoming the new superpower. The U.S. is becoming the new two-class third world country of have and have-nots. The U.S. is sold out.

[redimpss5]

I still say, if they can sell there, they can sell anywhere. This is the start of the new wave of car buyers.

[mgescuro]

la la la la la la la la la la la la la....

...i ain't gonna say a word....

[HoeyHimself]

Originally Posted by mgescuro

la la la la la la la la la la la la la....

...i ain't gonna say a word....

Just think about Bonds er something..dont even let the topic get ya flustered lol

[camaro_freak]

Originally Posted by HoeyHimself

I am just curious...why does China get a better GM then America? Sure they dont have everything we have that GM has to offer..but why oh why do we get the shaft? ya wanna know why?? Because Toyota and Honda are getting the American dollars that could otherwise be going to the American manufacturers that would then have more money to spend on making the customers happy rather then figuring out ways to axe employees and cut corners.

I'm beginning to wonder the same thing Hoey... in the last 12-18 months it seems the push is to remake GM into something better but only in foreign markets.

At this point it really seems they are shafting the home team :

[mgescuro]

Originally Posted by HoeyHimself

Just think about Bonds er something..dont even let the topic get ya flustered lol

From "My Vision of Cadillac"
My Vision of Cadillac

Dealership Experience:
-- All dealerships are to be stand-alone, or coupled with another premium GM brand (Saab, Hummer). If coupled, distinct and separate showroom floors should be used.
-- All dealerships should focus on the customer experience first and foremost and be treated in a "premium" manner. For example, if you walk into a Saks or a Bloomingdales, the service is impeccable, the salespeople are well dressed, and the surroundings are high class. The same should be done at a Cadillac dealership. Salespeople shoudl be well-dressed and focused on the customer experience. Perhaps take notes from Saturn.
-- All dealerships should be built to similar specs with a unified look and feel: elegant, comfortable, soft leather chairs and sofas, hardwood floors, displays should have a edgy, modern, feel to emulate the Cadillac A&S look.
-- Showroom floor should showcase and highlight the Various Cadillacs -- Sedans, coupes/roadsters, CUV/SUV. This way, you don't have a CTS sitting next to an XLR. You get a contiguous experience.

la la la la la la la la la la la la la....