GM has opened its first dedicated Cadillac and Corvette brands outlet in Europe in a move that it says is a significant step toward a greater presence for the brands in the European luxury and performance car markets.
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The first Cadillac and Corvette showroom in Europe is sited on London’s prestigious Park Lane.
Previous efforts to sell Cadillac brand cars in Europe met with mixed results and were based on utilising GM’s Opel/Vauxhall distribution channels, which meant Cadillacs appearing in selected showrooms next to Opel/Vauxhall volume model ranges.
Bob Lutz, GM Vice Chairman for Product Development and Chairman, GM North America, General Motors Corporation, told an audience of journalists prior to the showroom opening that previous efforts to sell Cadillacs in Europe were hampered by the lack of a dedicated network which meant that it was ‘impossible to get proper focus on a premium brand’.
But Lutz said that GM’s partnership with Netherlands-based distributor Kroymans would produce some 25 dedicated new Cadillac/Corvette outlets (‘Cadillac Experience Centres’) across Europe to enable ‘proper high-end customer focus’.
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By GlobalDataKroymans took control of distribution of Cadillac and Corvette products throughout Europe on 1 October, 2003 by forming Cadillac and Corvette Europe, which is a subsidiary of Kroymans responsible for running the Cadillac and Corvette business throughout the EU and Norway and Switzerland.
In the UK, the Pendragon dealer group has been enlisted to provide the dealer network (with five Cadillac Experience Centres to be set-up in major urban areas across the country).
Lutz also acknowledged that the ‘old-fashioned’ image of Cadillac cars in Europe needed to be transformed from that of the ‘poorly made, big American gas-guzzler with wallowy suspension and no brakes’, claiming that the new generation of Cadillacs typified by the CTS saloon demonstrated that Cadillac now had the right products to tackle Europe and build a global brand.
“Cadillacs are now, by any measure, world class products and nothing to do with the old-fashioned image of American cars,” he said.
With reference to the need for Right-Hand Drive (RHD) models for the UK and other markets, Lutz said that the CTS model in RHD will be followed by other RHD models and that the intention, ultimately, was to have a fully ambidextrous line-up, including diesels. However, the XLR roadster and the new Corvette, for which there are no plans yet for right-hand drive production, will also go on sale early in 2005 in Britain in LHD.
Cadillac General Manager Jim Taylor, speaking to just-auto, said that RHD had been ‘designed in’ to the CTS because of the intention to sell it in quantity in Japan. However, sluggish demand in Japan meant that other models – such as the SRX Crossover, STS (Seville replacement) and XLR sports car – were not made as easily adaptable for RHD and are now produced in LHD form only.
Taylor said that while it is expected that the common engineering architecture for next generation replacement models will have RHD designed in, those models are not due for replacement until the 2007-08 period.
In the meantime, that will mean that Cadillac either sticks with LHD on some models in some RHD markets or elects to make the extra expenditure for RHD development mid-cycle, something that would clearly be dependent on sales prospects. Taylor: “It’s the old ‘chicken and egg’ question – what comes first, engineering the products for the market or getting distribution in place?”
In terms of marketing, Taylor said that on a like-for-like basis, Cadillac cars would be priced in Europe around 10-15% below the levels of competitors. He pointed out that aggressive pricing had been at the heart of Cadillac’s resurgence in the US where CTS pricing, for example, was positioned underneath the BMW 3 Series. “When you’re up against established brand equity, you have to give folks a compelling reason to buy. That means having at least equal hardware and, overall, a better value proposition,” he said.
Taylor also said that the Cadillac approach to brand marketing across Europe would be multi-faceted according to national and local market needs. He expected that there would be a high event-based element to sponsorship and that targeted ‘ride and drives’ would also be important. “But the complexity of Europe, with its many markets and different cultures, rules out a ‘big-bang’ kind of approach,” he said.
He also confirmed previous sales targets for around 10,000 unit sales per annum for Cadillac in Europe by the end of the decade, adding that the numbers looked cautious. Cadillac sales in Europe are estimated at around 800 units in 2003.
In 2003 some 241,000 Cadillac-branded light vehicles were produced while sales in North America (US, Canada and Mexico) totalled 224,000 units.
Dave Leggett
