Cadillac Re-Launches in Europe With Downsized Ambitions

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Geneva
Auto Show

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.