Cadillac develops new strategy in Europe

Rick Kranz is product editor for Automotive News.Rick Kranz is product editor for Automotive News.
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Does Cadillac need significant sales in Europe for the brand to be a successful global player?

No, says Cadillac boss Don Butler.

But the brand is not abandoning Europe, either. It’s working on a new, or perhaps boutique, strategy.

Cadillac has tried for about two decades to sell vehicles in Europe.

Through September, 412 Cadillacs had been sold in Europe, down from 953 in the year-earlier period. A good portion of the failure was due to the lack of an appealing product line -- big vehicles designed for American buyers, and no diesels. But with the upcoming ATS, a compact sedan aimed at the BMW 3 series, and the XTS sedan that Cadillac views as an Audi A6 challenger, Cadillac has two appealing new products. Diesels are under consideration.

It’s a different story in other world markets. The brand expects to sell 50,000 vehicles outside the United States this year in 37 countries. Of that number, a little more than half of those Cadillacs are expected to be sold in China. The SRX is the brand’s No. 1 seller there. So it’s no surprise that China is the cornerstone of Cadillac’s global plan.

With such poor sales, why is Europe still important to Cadillac?

“We would strive for a meaningful presence in Europe for a couple of reasons,” Butler, Cadillac marketing vice president, told me this month at the Los Angeles auto show.

“No. 1, it is a significant market for GM overall. As one of the global brands, it is important for us to participate everywhere where it makes sense around the world, and it does make sense in Europe.

“The second thing, to some extent Europe still defines luxury. There is a certain credence to having a presence in Europe that makes sense in terms of the positioning and the appeal of the overall brand,” Butler said.

“When I say meaningful presence I am not delusional enough to think that I will compete head-to-head volumewise with BMW, Audi or Mercedes-Benz in their home market. That would be silly for me to think that way. Europe is a very, very tough market, very, very entrenched in terms of ethnocentric allegiances to those brands. So meaningful presence but not significant in terms of huge volume.”

Butler offered no timetable.

“Once we have demonstrated success in the U.S. and China, we can begin to grow and leverage a meaningful presence in Europe.

“I almost look at it like a boutique approach, almost like Aston Martin or a Bentley in the U.S. Not huge volume but everywhere the consumer experiences and touches that brand, it is done with the utmost level of class, a very high level of sophistication. That is the same kind of approach that we would look to take in Europe.”

Added Butler: “Do you need to be successful in Europe? No, I don’t think you need to be successful from a huge volume standpoint. But a meaningful presence in Europe does make sense.”

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