Jonathan Nash has been working at developing sales at Saab in Britain since 1989. When GM was looking for someone in-house to develop Cadillac in Britain, it naturally looked to Mr Nash. After past disappointments for the brand he’s hoping to set Cadillac on the right path in Britain. Dave Leggett recently met up with him at GM’s UK headquarters in Luton.

General Motors in Europe hasn’t had an easy past decade and a half. The focus has been on cutting manufacturing costs, developing its mainstream European volume brands – Opel and Vauxhall (in UK) – to make a profit, while also improving the end product. While that was the main focus, other things – perhaps inevitably - got less attention. Saab seemed to be forever on hold, something that cumulatively added up to something verging on neglect as the premium brand eked out barely sustainable sales from just two model lines.

And what about Cadillac? How can Cadillac be a global premium brand and not sell in Europe? Dipping the Caddy toe in with the Cadillac Seville a while back demonstrated just how tough the European market is for the Cadillac brand. It's a notoriously tough market to break into at the premium end, with the established German marques enjoying very high levels of customer loyalty. Just ask Lexus.

In 2003, GM decided to work with a distribution partner, Kroymans. Netherlands-based Kroymans – an upscale car brands specialist - would be able to use its local knowledge to build a solid Cadillac retail network alongside the rolling out of new product such as the Trollhattan-produced BLS which has been specifically developed for Europe (and BLS is not sold in the US). That was the theory.

Progress has not been smooth and Cadillac sales haven’t evolved as fast in Europe (or the UK) as GM would have liked. 

GM takes over from Kroymans in UK

In Britain, GM last year took responsibility for Cadillac, Corvette and Hummer sales, their marketing, distribution and aftersales away from Kroymans and brought it in-house. Jonathan Nash had that responsibility added to those that go with being Saab UK’s MD.

Nash is candid about the problems Cadillac has experienced in the UK.

“Kroymans was a very experienced retailer with some wholesale experience. They were also particularly knowledgeable about specialist American vehicles. Kroymans took responsibility for forming distribution agreements with various other national companies.

“In the UK, they did a deal that meant Pendragon became the official importer for Cadillac and Corvette in this country. It looked like a good plan but the arrangement did not work as well as anticipated.

“The volumes that were anticipated by all parties did not materialise.”

There was a strategic rethink, but Nash says it was about finding a way forward rather than apportioning blame.

“Clearly none of us did a very good job and the volumes that we managed to achieve at Cadillac in the UK speak for themselves, unfortunately – numbers that we are not particularly proud of.

“All three parties – Kroymans, Pendragon and GM - got together at the end of 2006 and early 2007 to consider the way forward.

“I think the idea – and I wasn’t a part of that discussion at the time – was to take the learnings from the development of the Saab brand in the UK and apply them to the development of these new brands in Britain.”

And another part of the thinking was to get GM’s considerable commercial resources utilised to boost Cadillac.

“It was a very candid discussion and it was decided to lever off the strength of GM’s commercial operation in the UK to assist Cadillac. Cadillac had been exclusively sold through Pendragon sites only – there was a liaison going on of course, but there was no direct GM involvement in terms of fleet sales initiatives, pricing, specification, accessing the resources that are here in this building. There was no prohibition of that - but it just didn’t happen.

“We wanted to see how we could get the existing GM strengths in the UK to work for Cadillac – exemplified in things like Vauxhall’s fleet pre-eminence, Saab’s established premium network, and increasingly the experience with Chevrolet in launching a brand new brand.

“We came up with a revised structure to take Cadillac forward. Marketing and distribution rights for the UK and Ireland were ceded by Pendragon to GM UK. And we were delighted to retain the really rather good retail facilities we got from Pendragon and if I’m very honest – they’re rather better than the sales would normally allow; Pendragon had invested very heavily in bricks and mortar in some great locations and just wasn’t getting the return because the volumes weren’t there.”

And Nash’s experience with Saab in the UK was seen as particularly relevant.

“I’d been right the way through the Saab organisation in Britain from when it was 14,000 units to where it is now, around 27,000 units a year. And we just did what we said we do – we would leverage the existing GM resource to get great brands wider appeal and greater reach. We did it with Saab and we think we can do it with Cadillac.”

If this is GM’s third attempt with Cadillac in the UK why should it be successful this time?

“The answer lies in the fact that Cadillac is treated as an existing member of the GM family utilising the strength of GM. And that’s a key thing that we haven’t done in the past when we have struck off and tried to do it as a specialist niche brand while utilising independent third parties with no GM baggage. We also tried, earlier, aligning Cadillac alongside Opel/Vauxhall and perhaps not giving it quite the right balance…

“It hurts us that we haven’t done such a good job so far and certainly that we haven’t done justice to the potential of Cadillac.”

Cadillac goes global

Nash sees a broader context that is important, too.

“This move has coincided with a determined effort by GM to really put Cadillac on the map globally. It’s been talked about in the past but Cadillac is still not quite in the ranks of the true global brands. It’s well known in the US of course, but there’s a bit of a job to do in Europe and, in my view, also in certain markets in Asia-Pacific where Cadillac is still somewhat of an emerging brand.

“But in order for GM to be able to say this is a global premium brand along the lines of Mercedes-Benz, they had quite a lot of work to do.

“And you can see that coming through in the product renaissance, the new product programme, the introduction of diesel engines, the European sizing of the cars, the widening of the offer – lots of things that indicate GM is very serious about going global with Cadillac.”

Cadillac as a non-German, low-volume alternative
What is Cadillac in the UK going to be doing?

“Well, first of all, we’re going to proceed somewhat cautiously because we have some credibility issues with lots of folk, including customers, retailers – who have seen this before – and we do need to match the development of the brand and the product offer, with the requirements of the UK customer. And they aren’t entirely synchronised yet, but they’re getting better and converging."

What does he mean by that?

“I mean that big petrol engine saloon cars with rear-wheel-drive do have a place in the UK market, but it’s not a big volume place. Compact sporty executive cars with diesel engines and a range of petrol engines are what our competitors are really good at."

And who does he pick out as competitors for Cadillac?

“In terms of the area of the market we are operate in, the corridor of competitors if you like, rather than specific brand competitors, it’s Mercedes-Benz, Jaguar, BMW and Lexus.

“We are not going to try and convince loyal BMW customers that this is a BMW made in the US. What we are going to aim for is what we think is an increasingly big opportunity: people who have got and have had a number of German brand executive cars, which in the main they are entirely satisfied with, but we want to offer them something that is an alternative.

“So we are trying to exploit the idea that perhaps some of those brands are becoming somewhat ubiquitous – and BMW is now getting a little nailed for that. If you’re a high-end BMW 5 Series customer or a Mercedes E-Class customer you might legitimately begin to wonder, what can you have to be something different, to stand out slightly from the crowd? They’re the volume brands now.

“The Cadillac brand is certainly distinctive from those German brands. Yes, it’s fairly bold, it has dramatic styling, it’s extrovert in its nature and no doubt some German executive car customers would rather stick with their brands, but we think there is sufficient scope for an alternative choice, something that is different.”

More Cadillac product on the way

And what of the product to go with the brand?

“It’s great to be enthusiastic and passionate about the brand, of course, but you need to nail down the numbers with a good portfolio of product that you can get into the marketplace.

“Up until we started to get the latest generation of Cadillac products, we weren’t really producing products that had relevance or resonance with British customers. So, compact, sporty, new generation Cadillacs with diesels are definitely in with a chance. Big V8-engined traditional American vehicles are not quite so relevant.

“Cadillac is strong in awareness terms here but much weaker in consideration terms. Awareness being ‘Have you heard of Cadillac?’ Yes. What does it mean to you? Well, lots of things…mainly somewhat historic, there’s a kind of blend of everything from Bruce Springsteen, Elvis Presley, pink Cadillacs and DeVilles. It’s a rather confused mix in the report backs we get, but that’s something we can turn into a positive – people know the name.

“So one of our jobs is to define and refine what Cadillac means – why would you choose one over a BMW or Mercedes, which are after all, pretty good cars? So, there’s a little bit of work to be done there.

“There’s also an opportunity to exploit Cadillac’s lower volumes by being more personalised; we can deliver a much more personalised experience for the customer than BMW or Audi can, simply because they are so big in volume terms now. That’s a bit of a Saab trick – turn your small size into an asset rather than a hindrance.

“But you need great retailers – retailers who are really tuned in to customer service and individuality, used to dealing on a one-to-one basis and used to, frankly, dealing with 20 customers a week rather than 200.

“So, there are three basic areas of focus. Refining the product in the UK, sharpening the definition of the brand and then getting retailers who can deliver that brand promise to the customers. And that’s a job that will take five to ten years so we’re only on Chapter 1.”

“We’ll be helped by the fact that there is this absolute determination at GM to make Cadillac a global brand which means they will bring product to market quickly which will help me match to product requirements.

“For example CTS will be available in RHD and just having RHD is pretty good – originally the offer was very restricted on RHD - and we have an ever-expanding RHD offer. There’s BLS in RHD is saloon and estate, we have a previous model year CTS which is RHD, petrol only. The new CTS in RHD is about six months behind what has been put into Europe and arrives here in the summer of this year. We have some extended variants on that  - more than one bodyshell will quickly be in the marketplace [look for a CTS Coupe based on this year’s Detroit Show CTS Coupe Concept].

“Then we have STS which is the full-size RWD luxury saloon car – again in RHD. So there’s plenty of offer already and then you get into the slightly more specialist crossovers and so on. Then there’s the more traditional US-based product, like the Escalade, which has quite a loyal following in Britain – that remains a full-size truck in LHD and petrol only.

“So, lots of new products are coming in and powertrains – the added complication for the UK and Europe in general is gasoline versus diesel and CO2 sensitivities.

“The product will get there and will act as the pillars for the development of the brand. Ironically, while the brand needs to be brought up to date with these new products, there is already an understanding of what Cadillac is about: extrovert, it’s about a success factor, it’s about bold design.

“People who buy Cadillacs – both now and in the future – are certainly quite interested in showing that they have made it and that they are successful and comfortable with that level of display. That’s not going to be the majority of the premium sector market but it’s a good percentage.”

And the UK numbers?

“We’re not talking about tens of thousands in the UK, we’re talking hundreds. Calendar year 2007 we did just under 450 Cadillacs and Corvettes (LHD, 60). There were just under 30 Escalades, SRX 30 units and there were just over 100 CTS and just over 200 BLS units.

“In overall vision terms, I would say that within five years we need to get up to around 5,000 units a year for Cadillac. That vision is highly dependent on product entry and availability of powertrain but it links into some of the numbers we have seen our American competitors establish numbers for in the UK.

“That’s the vision. Because we have had a somewhat disappointing start we’re going to approach this really conservatively and hope to produce numbers which speak for themselves.

“One of the biggest problems in the past, in terms of the difficulties and expectations at Pendragon and Kroymans, was that they managed to get themselves tied in to numbers that they could not deliver and I’d rather not go there because that’s a painful experience for everybody.

“This year we’re aiming for around 500 units with Cadillac – a modest increase. With that we get the new CTS which starts sales in September. From late 09 there is the arrival of diesel for CTS and the continued development of BLS – the mainstream European offer – should enable quite a rapid ramp-up.

“CTS with a diesel engine is going to be quite a turning point in terms of awareness and appropriateness to UK customers. It’s a brand new engine, displacement just under three litres. It’s a turbocharged V6 and it’s being developed specifically for application in GM premium brands outside of the US. It allows us to have a 6-cylinder high performance diesel which is critical and puts us in the 200 horsepower range which is needed for the CTS and allows us to go head-to-head on CO2 and all the other elements with, typically, Mercedes-Benz – they have a 2.7L and a 3.2L engine and we need to get in there. We think ours will be technically better than theirs because ours is newer, but I don’t want to get too chest thumpy about that because I haven’t actually driven it yet.

“Everyone at GM in UK is getting genuinely really excited by the opportunity ahead for Cadillac. In terms of the size of the business and volumes it’s small, but in terms of halo and the fact that it is very premium and we’ve got something good to go with, everyone’s very excited.”