Bob Lutz at Fastlane – pass the tissues

If you ever wanted to read something designed to make a hardcore Saabisti tremble, try heading over the Fastlane to read Bob Lutz’s latest pressing. Better still, just read on…the relevant bits are quoted right here and I don’t want to encourage Lutzy by giving him more clickthroughs.

In fact, Cadillac made a lot of news last week. We took the wraps off an all-new 2.9-liter, 250-hp diesel V6 that will be used primarily in Europe, and will be introduced in the Cadillac CTS in 2009….

….The availability of diesel powerplants is obviously hugely important in Europe, and this is something we’ve needed to make Cadillac a stronger player in the market, so I’m glad it’s in the offing.

Wagons are another popular item in the European auto market that Cadillac had been lacking — until now. For the first time in its 104-year history, Cadillac will have a pure wagon in its lineup later this year when the BLS Wagon goes on sale in Europe…..

…..This vehicle is another example of our global product development organization in action, sizing up what is needed in which market, and quickly and efficiently delivering.

OK, that ain’t so bad. Here’s the scary bit.

In this case, we’re continuing to build the Cadillac brand in Europe, where we aim for it to be a true contender in the luxury market, so we’re expanding its offerings, both in terms of product and powertrain, to meet the needs and expectations of European customers.

That being said, we’re not naïve about it. No one expects Cadillac just to appear in European showrooms and take the continent by storm. That’s crazy. For one thing, we know the established competition is far too formidable for that to happen.

We also know we have to take our time to introduce ourselves to European customers, and show them what Cadillac is all about. So we’re building the Cadillac portfolio in Europe, and its momentum, gradually.

This is the worst bit:

But make no mistake: Cadillac is in Europe for the long haul.

I’ve been ranting and raving about Cadillac’s expansion into Europe for some time now and this is just adding more fuel to the fire. But it’s becoming a fairly scary monster.

GM initially set fairly modest sales targets for Cadillac in Europe, aiming to reach five figures per year by around 2010 if my memory serves me correctly. Recently, market analysts have revised that figure downward to around 7,000 vehicles a year at most. Last year, around 600 Cadillacs found homes in the UK market, which would always be one of the major markets for Cadillac in Europe.

Around 600.

UK sales data doesn’t even list Cadillac as a brand to be recorded. I assume it’s bundled in with the figure for “Other Imports”, of which 82 were sold during February 2007. That’s 82 units of all “other imports” – combined.

The BLS is, by all reports, not a bad car at all. Reviews have been promising and I’ve even had a few comments on this site and via email from people who have driven it saying that it’s quite pleasant. But the overwhelming sentiment from all the Europeans that I’ve heard of is that they wouldn’t touch a Cadillac with a barge pole and neither would any of their friends.

If buying a Cadillac is a statement of your status in the US, then Americans shouldn’t be surprised that it’s a similar story, from what I can tell at least, in Europe. The problem is, the Europeans are quite selective and exercise a lot of discretion when purchasing their executive autos, and the ones that I’ve heard from contend that there’s nothing that would show up your lack of discretion more that choosing a Cadillac over it’s European competition.

Put basically, you might sell one or two Escalades to soccer stars with all the confidence and not a care in the world, but good luck in building a brand. The Europeans will resist the American influence and stick with their BMWs, Audis, Mercs, Renaults, Citroens, Peugeots, Jaguars, Minis, Fiats, Alfas, Volvos and Saabs. Of course, only a few of these will be direct competitors to a Caddy. But Caddy’s competition will be the cream of the crop, the measure of refinement and most of all, not American.

That last phrase might get a few noses out of joint, but it’s an important and honest part of the story here. Right or wrong, there is a groundswell against American influence in many parts of the world and if the way to express it is to resist the thought of a big boxy car, then so be it. The European distaste with Cadillac has proven itself over the last few years and it will keep on doing so until someone realises they made a mistake.

But that’s not going to happen.

In all but the upper echelons of companies like GM, people are almost as busy building track records as they are building cars. How many stories a month do you read about Executive A moving from Company B to Company C after a successful stint developing Brand X? Think Michael Mauer’s move from Saab after the release of the 9-3 Sport Sedan and development of Saab’s 9x and 9-3x concepts. It happens all the time. And nothing will kill a seemingly good career like the admission of a huge, dollar-costing mistake.

So yes, we can indeed look forward to Cadillac’s march onward and downward into Europe, complete with infrastructure and marketing costs that could have been invested into a brand that’s already understood and respected in Europe – Saab.

Our favourite little company is coming off a record sales year. It has developments in the pipeline that should pitch it much more competitively against its entry level premium competition in the first instance, and the mid-level premium sector in the near to medium term.

I’ve said it before and I’ll say it again. GM should cut its losses on Cadillac in Europe and invest that money into Saab, a global premium player that’s been starved for too long. Could Saab use that money to build a better interior? Could a new Saab make use of that big new diesel they’re bringing out in 2009? And could they do with a marketing injection in key markets like Germany, Spain and the UK?

The answer to all of these is, of course, yes. Saab has a huge amount of upward potential in Europe and in other markets as well. So has Cadillac – how could you have anything but room for growth selling in such small numbers? The only difference between the two is this:

In the European market, Saab has at least a snowball’s chance in hell of succeeding.

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10 Comments

  1. Swade,

    Michael Mauer only helped design some of the wheels for the 9-3 SS. The entire design was already completed when he walked in the door in 2000 by Einar Hareide.

    “Think Michael Mauer’s move from Saab after the development of the 9-3 Sport Sedan”

  2. “For the first time in its 104-year history, Cadillac will have a pure wagon in its lineup later this year when the BLS Wagon goes on sale in Europe…..”

    I heard: “We are re-badging the 9-3 SportCombi, and all that is good with it, to send it away into Cadillac purgatory!”

  3. “For the first time in its 104-year history, Cadillac will have a pure wagon in its lineup later this year when the BLS Wagon goes on sale in Europe…..”

    I heard: “We are stealing a 9-3 wagon and spending lots of money trying with all our might to make it look revolting”

  4. Thanks Ryan. Now suitably edited. One shouldn’t write off the top of one’s head sometimes.

    I’m not sure it changed the point being made, however…

  5. Swade, not only is your comment about anti-American-ness a good point, but I’d even take it farther: in America, all things being equal (or even all things being a little bit worse,) lots of people will buy a Cadillac because it’s American. This is legitimate; support your neighbors, apple pie, freedom, justice, the American way, etc. I’m sure there are lots of Swedes who buy Saabs for the same reason. But try convincing a European to buy a car not from their country, and you’d better have a pretty persuasive vehicle to sell. I think the CTS and STS are great cars, I just don’t see them succeeding in the cramped environs of Europe.

  6. Crackhead Lutz cant get it thru his CH that not every 30-50 something aspires to his beloved Cadillax.(or Buick)
    Here in the US, Saabs head is held underwater by big brother and the travesty is sadly spreading overseas.
    Do love the idea of a stump-ripping chain-drive diesel V6 thats capable of 40mpg however.

  7. I think the writing is on the wall. SAAB is GM’s stop-gap solution to Euro luxury until they can establish Caddilac as a real competitor there – then it’s sayonara SAAB. I mean GM has done some stupid sh** but I seriously doubt they would purposefully build two brands to compete directly with each other if the long-term goal wasn’t to have one of those brands go away. Buh-bye SAAB .

  8. GM is ruining Saab. Please sell the company to someone who has a true passion for cars.

    The 2008 9-3 will be the model that makes me decide to stick with Saab or head off to BMW. Lets hope they dont bugger it up!

  9. Nice post, Swade. If throwing millions at Caddy nets you 7,000 sales… Throw that same money at Saab and you might dent another market besides the UK and Sweden.

    ( 2/3 of all Euro sales are Sweden, UK )

  10. The good news is that though this is the “long-term” strategy for Cadillac in Europe, it’ll only be as long as those in power right now are in charge.

    The reign of a car company head is not all that long and when things go badly and the company keeps losing money quarter after quarter, the head and his cronies are forced-out and the new guard comes in and blames everything on the previous regime, and then change the plans.

    Hopefully this happens before SAAB is completely adsorbed into the collective…

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