HILVERSUM, Netherlands – General Motors is helping to finance a Dutch dealer group’s expansion across Europe.
GM is providing $25 million (E19.4 million) to help Kroymans Corp. market its Cadillac, Corvette and Hummer brands in Europe.
GM appointed Kroymans as its sole European distributor for the Cadillac and Corvette on October 1, 2003. In recent months, Hummer was added to the portfolio.
It’s believed to be the first time a volume manufacturer has outsourced sales and distribution for one of its brands on a Europewide scale.
And GM’s appointment of Kroymans as the sole European distributor for Cadillac goes against the industry trend.
Over the past few years BMW has taken direct control of its new-car sales in European Union countries from private importers. After Daimler-Benz and the Chrysler group merged, DaimlerChrysler took control of Chrysler’s sales in Europe.
Kroymans CEO Ton van Soest said his company is getting “serious” support from GM but declined to comment on the amount. A GM spokesman also declined to comment, but Dutch dealer sources and GM officials privately confirmed the amount is $25 million.
Outsourcing European sales of its Cadillac, Corvette and Hummer brands to Kroymans is part of GM’s ambitious plans to boost Cadillac sales in Europe to 20,000 units by 2010 as part of its strategy of making Cadillac a global brand. Cadillac’s western European sales were 1,157 last year.
Small financial risk
GM, which has sent three of its marketing experts to Kroymans, gets the benefit of an ambitious distributor with only a relatively small financial risk.
Kroymans is opening 35 Cadillac and Corvette Experience Centers in major European cities such as Stuttgart and Düsseldorf. The first experience center opened in London last December.
The company is one of Europe’s smaller independent dealers. Its sales last year were E1.7 billion. By comparison, Porsche Holding, Europe’s largest car dealer by sales, has annual sales of nearly E8 billion.
But Kroymans has big ambitions to expand out of its core market in the Netherlands.
“We want to grow, but our priority is to achieve higher sales through added value of our different operations and services,” van Soest said.
Kroymans recently added Fiat Auto to its list of automakers willing to give the retailer full control of its distribution for a market.
Fiat outsources too
Starting in June, Kroymans will take over Alfa Romeo distribution for the Netherlands from Fiat Auto Nederland.
Van Soest said Kroymans is ready to take on other “outsourced” sales and distribution deals for automakers.
“After we obtained Alfa Romeo distribution in the Netherlands, why not in other markets,” he said.
It was Kroymans’ executives who approached GM suggesting they could boost Cadillac sales if the retailer was allowed to be the brand’s sole European distributor.
Kroymans sources say it was the retailer’s idea that GM create a smaller Cadillac specifically for the European market.
The idea became a reality because Kroymans executives were able to convince Robert Lutz, GM’s vice chairman, the the so-called Baby Cadillac would make sense.
GM will introduce the BLS (B-class luxury sedan) early next year. The upper-medium car is designed for European tastes and built at Saab’s plant is Trollhättan, Sweden.