Cadillac plans European car to fight German rivals



Reuters / August 21, 2003


Cadillac begins big push in Europe - 2003-08-18


DETROIT (Reuters) -- Cadillac, General Motors' luxury brand, is considering building a mid-sized car in Europe to compete in the heart of the market against its German competitors, a Cadillac official said.

The model would be smaller than the Cadillac CTS sedan, and about the same size as the BMW 3 series and the Mercedes C class, said John Howell, Cadillac's director of global brand development.

"We need to be competitive with the lower end of our main competitors, but we don't want to go down into the compact and subcompact classes," Howell told Reuters. "We might be willing to do a vehicle, an entry-luxury vehicle."

Reuters spoke to Howell on Wednesday and last week.

The vehicle, part of Cadillac's renewed expansion into Europe, the world's largest market for luxury brand vehicles, could arrive in two to three years, Howell said.

One factor for building in Europe is a 10 percent duty on vehicles imported from the United States, Howell said. Cadillac also could take advantage of Europe's trade agreements to export to other countries, including back to the United States, he said.

Cadillac sells the American-made CTS and larger Seville sedans in Europe. But Europeans complained that the Seville, launched in 1998, was too large for the roads, and tuned for a soft ride on America's rough highways. GM stopped selling a right-hand-drive version of the Seville in Britain several years ago.

"The Seville was an American car designed for the American market," said Bruce Harrison, a consultant with the Automotive Group of automotive advisors Global Insight.

Through June, Cadillac sold just 107 Sevilles in Europe, Cadillac spokesman Kerry Christopher said.

The CTS, which went on sale last year, was partially engineered in Germany and has received positive reviews in Europe. But its sales through June totaled just 284 in Europe.

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Cadillac's limited lineup and low profile in Europe has also been a hurdle to sales. Cadillacs are grouped with mainstream Opel vehicles at select Opel dealerships across Europe. The Cadillacs are often forgotten at the back.

In late June, Cadillac appointed the Dutch car dealership group Kroymans Corp. B.V. to spearhead an effort to build 25 Cadillac Experience Centers in major cities across Europe. Cadillac expects the new, large dealerships will raise its recognition across the continent.

Cadillac will also expand the lineup with the SRX mid-sized SUV and the XLR roadster next year, followed by the next-generation Seville, to be called the STS, in late 2004 or early 2005. The Corvette sports car will also be included at the new Cadillac dealerships.

The strengthening euro had made importing some of those vehicles from the United States more attractive, Howell said. "We've definitely swung from a marginal business case situation to a very profitable business case."

Europeans have also complained that Cadillac's big V-8 engines guzzle too much gas. But the CTS and the SRX both have six-cylinder engines, and a four-cylinder could be in a future vehicle, Howell said. Cadillac will also add diesel engines, which are in more than 40 percent of new cars in Europe, in three to five years, he said.

With the additional vehicles, Cadillac sales are expected to grow to more than a few thousand a year, Howell said without giving specifics. "It's not the kind of thing where we're going to do a couple thousand, which has been our history," he said.

 

Interesting timing.

 

....and who will be the first to call this "rice"?

 

Well we know that a next gen CTS is due about 06/07 (from magizine article), and now we may have a smaller car coming out around the same time.

What was that Caddy in the '80's that was based off the Cav.?

 

It's gotta be rear-wheel drive. Europe wouldn't dig a FWD luxury car, and Cadillac Europe doesn't want to dilute their image (I could be wrong--depends on how bad the GM Cancer affects them).

On a TOTALLY UNRELATED SUBJECT (ahem), I want to make a couple points that have nothing to do with each other or this news:

- There's going to be a Chevy/Pontiac/Cadillac RWD program on a new platform
- Hints have been made that a non-Cadillac small/mid-sized RWD coupe may return--er--debut in or around 2006/2007.

Don't know how that's related, though. Could be anything.

 

I think the whole "uses to much gas" thing is a crock. I bet that it uses less than any of the AMG motors and even the M3's and M5's engine. Now it may cost the europeans more for a V8, but not because it guzzles too much gas compared to others. I'm not sure they mean Cadillac's V8's specifically or just in general, but they made it seem like only the Caddy V8's eat too much gas while the BMW's and Mercedes V8's have no problem.

 

Where did you hear this?

Cimmaron

 

"One factor for building in Europe is a 10 percent duty on vehicles imported from the United States, Howell said. Cadillac also could take advantage of Europe's trade agreements to export to other countries, including back to the United States, he said."

And what... pray tell... is our duty on vehicles coming from Europe to the US?

 

If you go to the thread, CTS Convertable, I posted and article about a CTS wagon. GM says they could add it as earily as 06/07 , then later it says that they can't add it till the next gen CTS.

 

Isn't Holden also looking at making a smaller than Commodore sedan also?

 

I agree that is a BS exuse. My wifes 2001 Jetta VR6 only gets 17.5 MPG city and 20-24 MPG hwy.

 

The CTS just came out in MY 2003 and is selling great so I don't think they will replace it by 2006, I think it will be around until 2008-2009

a smaller than CTS sedan would make a great car to build a new lighter Camaro off of.

 

It actually came out early 2002 as a 2003 model, so it will be at least 3 years old when it get's restyled and updated.

It's only a year and a half old now, and Cadillac has already reengineered much of the front structure and a few chassis components for 2004, so it's not all that unlikely.

 

Torana...

Small car V8 engine.

I don't know if it will go ahead, Hannenburg is trying to now flog the VE platform to Opel and if they take the VE then I don't see them wanting competition to the Vectra.