General Motors Announces Plans To Expand Cadillac In Europe
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Coinciding with the announcement to remove Chevrolet from the mainstream segments in Eastern and Western Europe, General Motors has announced plans to expand the Cadillac brand in the region.
The automaker is just now finalizing plans for expanding the luxury brand’s presence in the European market, which calls for enhancing and expanding the Cadillac distribution network over the next three years as the brand prepares for “numerous product introductions”.
“Europe is a key region for GM that will benefit from a stronger Opel and Vauxhall and further emphasis on Cadillac,” said GM Chairman and CEO Dan Akerson”.
The GM Authority Take
For all intents and purposes, Cadillac is a non-entity in Europe — selling a handful of cars each month out of a select few retail locations. But the global growth of Cadillac is an integral part of General Motors’ mission to increase profitability while turning the brand into a global luxury powerhouse to rival the likes of BMW, Mercedes-Benz, and Audi not only when it comes to products and sales volume, but also in terms of brand image and cachet.
As such, as GM readies to launch the newest and most-desirable Cadillac vehicles in North America and China such as the 2014 CTS, ATS-V, ATS Coupe, ELR, and LTS, a retail expansion makes complete sense. GM will release specifics behind its plans to grow Cadillac in Europe in the coming months.
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In the long run I personally see not more than 30k to 40k Cadillacs being sold in hole Europe. Don’t know if this new expansion plan is a very good idea as GM needs to built up a new dealer network and invest in a very agressive marketing to reverse the bad image of Cadillac in Europe.
On the other hand, with higher margins the Cadillac brand could be a benefit for GM Europe.
“Hole” Europe is correct. Black HOLE.
With that said, if they want to compete with the Germans, they need to go head to head on their home turf and prove it. It could also improve perceptions of Opel in Europe if the new Caddys get the kind of reviews in Europe they get here.
The bigger story may be the retreat from Korea. Must be hard to compete with Kia and Hyundai on their home turf.
First of all they’re planning to pull out of Korea because of all the tension from labor unions as well as politically. Second of all Cadillac is essentially starting from scratch in Europe which gives it the advantage over Chevy which has seen a few years of rebadged Daewoo crap. Third of all, Cadillac needs diesels, I believe a slightly upgraded version of the diesel in the Chevy cruze would do well for the ATS, as well as the TT V6 GM developed with VM Motori in the CTS
Cadillac needs to start some where and start they must now. They now have two legitimate cars and more qualified cars to come.
If they sell 30k-40 in in any of the first 5 years would be great. This is a building process and you need to earn your keep and rep in the market. People there are not as aware of the new Cadillac as we are but even Benz is now watching what they are doing as they have concern.
GM has made mistakes in sales networks and product and this time both should be resolved. They even have people from Europe in place to help with marketing this time to better address the needs, wants and concerns of the Euro customers.
GM does not need mass volume here as this is not Chevy. If you look at the numbers many of the models BMW, Benz and Audi sell they are no where has high in most markets as some assume. With higher price there is no pressure of massive volume.
As for Korea GM is just not going to commit Billions to plants where they could lay in ruble with the way the North is behaving. Note the Uncle has just taken charge and his is not a mellow guy, Much easier to import cars from nearby nations vs. losing plants and employees in a conflict. Investing in Korea is nearly like investing in Beirut in the 60’s.
It’ll be slow going for Cadillac in Europe. I keep thinking about how Infiniti managed to grow in just 5 years, but they had the advantage of having no track record; they were neutral coming into Europe.
Cadillac, in contrast, has had fits and starts in Europe, and their track record is less than satisfactory. Sure, their might be the odd German TV show the reviews the CTS, and Top Gear will likely drive the new CTS-V in the future….
But reviews won’t matter if people look at the car with lots of skepticism. Cadillac needs to prove themselves worthy with product.
Hopefully this expansion in Europe competing with BMW, Mercedes, and Audi will mean Cadillac will have a convertible
German economic nationalism is strong. Regardless of segment, they are inclined to buy domestic. I think Opel being American owned had harmed sales regardless of brand history.
The same will happen to Cadillac. I do see the brand doing well in Russia, and other Eastern markets. The UK may take a shine to the brand, too.
The US_EU Free Trade Pact is a key to Cadillac growing. It will save on tooling costs, and give the brand a more realistic, less pressured path to growth.
Cadillac may never be number one in the market but if they can make a decent presents and profit they can grow the segment and reputation as a global car. BMW and Benz were nothing here in the states till the early 60’s for Benz and late 60’s for BMW. Even then they took till the late 70’s to really take off.
But look at the sales in the states and Cadillac can and has lead most segments of late they are matched in. BMW and Benz do not have to be number one in sales to make money here so why does Cadillac have to be number one there to be called a success?