Holden together – postscript

Some news articles caught my eye in the wake of my opinion on Holden from a few days ago. In that article, I suggested that Holden might end up being too small for GM to keep what is basically a one-country brand.

First, from this week’s autoextremist op-ed:

Let’s face it, GM has Cadillac and Chevrolet. Yes, Buick has its primary role in China and GMC has its place in North America but make no mistake, the future of GM lies in the global success of Cadillac and Chevrolet.

Of course, GM also has Opel (for the time being, at least) but they’ve already introduced the Chevrolet brand into Europe selling a level below Opel. It would be a natural strategy to now push Opel slightly upmarket but European customers are unlikely to let them do that. Opel is Opel. It is to European customers what Chevrolet is to American customers and I don’t think American customers are going to see Chevy as a player in the premium market any time soon.

The entry-level Chevrolet strategy outside the US is to put a bowtie on products designed by GM’s Asian subsidiary, Daewoo. They’re typically made in low-cost countries in either Asia or Eastern Europe and then sold more broadly. Then they add some more sophisticated products based on global designs (Cruze, Captiva, Camaro, Corvette) if the market’s rich enough to pay for them.

Right now, Holden is basically Chevrolet but with a different name. With it’s market share declining, a key dependence on the Commodore for its links to Holden’s past and no commitment to future Commodores beyond the upcoming VF model, it would seem to me that it’s a simple matter of marketing economics that will decide if and when Chevrolet takes over Holden in Australia.

——

I mentioned Opel coming to Australia in my article earlier this week. It’s one of the real interesting developments for GM-watchers here.

Opel are being pitched as entry-level European vehicles. They’re not in the European luxury classes with the usual Teutonic suspects, but they’re definitely being pitched at a level above the basic Europeans and all the generic Asian brands.

So you have Holden and then a half-step up to Opel. Presumably, that’s the strategy.

So what are we to make of the Autoextremist’s claims about Cadillac’s global success also being pivotal to GM’s future? You might think he’s theorising, but he’s not.

From Autoblog, today:

General Motors has created the new position of global vice president for Cadillac. Stepping into that new role is GM senior executive and top lobbyist Robert E. Ferguson, who will oversee global growth and development of the luxury brand.

Ferguson is responsible for marketing, brand management and advertising for Cadillac around the world and is also expected to be responsible for sales in the new year. He will report directly to CEO Dan Akerson, who said of Ferguson, “The Cadillac brand will hit a higher gear under his watch.”

And from Daniel Howes at the Detroit News:

Cadillac is going global — again.

Like an aging rock star, General Motors Co.’s luxury brand is plotting yet another comeback on the world stage, this time led by a telecommunications exec-turned-Washington lobbyist theoretically armed with a strong Cadillac lineup. I can hear the chortling all the way from Munich and Stuttgart, where they’ve seen this show several times before.

Could the ending be any different?

It could, if GM and the masters of Cadillac can replicate effectively the kind of long-term product development discipline and aggressive brand management the automaker and its rival, Ford Motor Co., devote to their lines of full-size pickups. If not — and there’s a decent chance of that, considering past efforts — Cadillac-goes-global will be yet another laugher across the industry.

So once again, GM plan on filling your market with a vehicle for every purse and purpose. It won’t be like the old days, thank goodness, but the extra brand focus needed for a serious tilt at such a plan will likely put little Holden’s future even closer under the microscope.

And Opel? Who knows. The way things are going between GM and the German unions, anything could happen. I think it’s a miracle they’ve made it here at all.

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19 Comments

  1. Oy, that Cadillac thing again. What do they drink at lunch at the Renaissance Center?

    GM, if you’re listening, here’s the deal: Cadillac is a very American brand. About as American as brands get in this world. Americans like German stuff. Germans, however, are not so smitten with things American, with the exception of jeans, Coca-Cola and David Hasselhoff. (And, if you think about it, the Hoff carries a German brand.) I’d go into the same schtick about France, but that whole Jerry Lewis thing creeps me out. The point: Europe is a little bit of a one-way street. It’s nothing personal; all of the automakers feel that way to some extent.

    What have the other US automakers “successfully” sold in Europe? Exactly what GM has sold there — products locally designed and locally produced by their respective European subsidiaries -OR- low-end cars produced in low-cost countries like Korea, South Africa or (formerly) Japan.

    With GM historically settling for the mid-market and below with their Opel and Vauxhall brands, can they compete in the premium market with those brands? My short answer is, ‘no’. There is some indication that Europeans are ready to embrace good America cars if they are given local content and branding (Chrysler 300 as Lancia Thema, Lincoln LS reskinned as Jaguar S-Type, etc.). IMO GM needs a branding partner in Europe if they want any chance of selling Cadillacs there.

    Hmmm…. I wonder what brand GM could use in Europe? One that has an iconic design history, has some upscale potential and stands for performance and safety to compete with European marques. I know there is one somewhere, I just can’t think of it right now. Bother.

    If I were GM, I’d be scrambling to develop a luxury brand for Opel a la Luxus/Toyota, Infiniti/Nissan, Maserati/Fiat, etc. I’d then put the Cadillac technology to work in some different sheet metal or at least a facelift. Perhaps they could buy the Bitter name? They already have a history with Opel/Holden.

    But what do I know? I’m just a bystander that’s seen this joke too many times to think it’s funny anymore.

  2. The problem with the current Cadillac lineup is that it is just a compilation of GM platforms with some additional gadgets and tons of leather to make it feel more up-market.

    -ATS: RWD
    -XTS: FWD
    Above that : Nothing

    -CTS: A gohst from the past, it is a quite dated car by now, but they can’t build a V-XTS that can compite with the V-CTS.

    -SRX: To heavy for Europe (5 Jears too late)
    -ESCALADE: This is not a car, this is a bling-bling version of the Sierra, something from the past.

    So with this line-up Cadillac will have many problems to compete against the Teutonic Three on a global basis.

    BTW, if GM introduces the Chevy Impala in Europe, you can say bye-bye to Opel.

    1. Your treatment of Cadillac is much too harsh. Cadillac certainly is NOT a rehash of other GM platforms, although just like all automakers including Benz, BMW, Saab, etc. there are many shared components.

      Escalade, perhaps. The numbers for that vehicle are waning fast even here in the US, but the profitability of that model keep it in the game.

      Other untruths:
      SRX is the exact same weight as a Mercedes-Benz GL, and it’s 1000 lbs. (450 kg) lighter than a BMW X5. Too heavy for Europe? I think not.

      As far as the CTS being a ‘ghost from the past’, its platform is newer than the BMW 3-series and the Mercedes-Benz C-class, its primary German competitors, by one year.

      Listen, Cadillac isn’t perfect, I know. On the other hand, it deserves a little credit where credit is due.

  3. For a Saaber this GM stupidity isn’t anything new but how many times do they want to bang their heads in the same brick wall…?!

    BTW: I love the Holden Ute… Would really want one!

  4. Opel is Opel because GM made them so. Or, in other words, Opel is where it’s at now because of Saab.

    There was a time when Opel competed directly with Mercedes (Opel Admiral for example) and had a high reputation. Even the Omega is still loved by its drivers.

    GM never understood that European drivers have a completely different brand perception. It is not “oh, last time a bought an Opel, but my income has increased, so this time, it must be a Saab”, but “I am gonne buy a VW, because they have shown that they can build high class cars (Phaeton)”.

    What about Australia?

    1. Further, I very much doubt that the Chrysler 300 now as a Lancia will have any success. And as far as I can see, the S-Type was much more than a re-skinned Lincoln.

      It is also noteworthy that all European brands that are now struggling, i.e. Fiat, Lancia, Alfa Romeo, Peugeot, had previously cancelled their prestige cars, though off course, it’s hard to tell the causality here.

      Citroen is an exception, but then, the C6 is based on the C5 platform, and despite being a nice car, suffers from the limits of the platform (small trunk, low towing capacity, aerodynamical problems) that might turn people off.

      1. While Skoda is booming incredibly. And guess what? Because they have demonstrated that they are compentent (Superb).

        Back to work….

      2. My mistake. I had seen that the Chrysler exports to Europe were strong, and I (wrongly) assumed that the 300 (Thema) made up the bulk of the numbers. Turns out that it was the Dodge Journey rebadged as a Fiat Freemont.

        Substitute the Freemont/Journey for the 300/Thema and the comment still stands.

        Chrysler is having some success selling American cars in Europe through Fiat and their brands.

        1. Maybe, or maybe not. Hitherto, the cars were sold as Chryslers, and they did have some (small) success. It may well be that the buyers in that statistics are still the same Chysler buyers who have no problems with the fact that their Chryslers are now badged as Fiats or Lancias.

          This is no proof that Fiat or Lancia buyers, and in particular Lancia buyers, will buy these re-badged cars. Nor that any former non-Lancia buyers who did not like the Lancia Thesis for whatever reason, but liked the Lancia brand in general, will now be more inclined to buy this “Lancia” 300.

  5. GM don’t have a clue do they?

    Jettison GME (Opel/Vauxhall) i.e. Russelsheim which had German/Swedish/British inputs and you sink GM – period. GM Daewoo products might have improved greatly as have NA products but most of that is down to engineers in Russelsheim. Having driven a Korean car last week (Hyundai Accent saloon) which was competent but built to a price, I won’t be buying a Chevrolet soon. Chevrolet screams ‘BUDGET!’ but I do like the north american products – but only on american roads.

    The 9-5 Junior (ie Insignia) is selling very well as is the new Astra, the Insignia being nearly as large as the Omega, the only thing letting the brand down is badge snobbery and the fact they were late into the diesel game..

    I saw plenty of Commodores and Monaros in South Africa last week (badged as Chevvys) and see some occasionally in the UK…If it wasn’t for the running costs I would hunt one down.

    The path GM seem intent on is to get people to buy cars with their wallets and not their minds and hearts….having driven a Hyundai hire car last week you can tell it’s for people who couldn’t care less what they drive – once GM get to that point that will kill the image.

  6. I think Cadillac needs to do something like the “Sixteen” concept car, i.e. something extreme. I know the timing is wrong for that, but they need to make a statement, not just a square-jawed BMW wannabe.
    Instead of aiming at the stars, GM is aiming at Munich. And still not reaching the goal.
    As it is I’m almost happy that Saab left GM in time. This is going to get uglier.

    But I still I wanna see someone pull into an American Car Club meeting in a Chevrolet Matiz. With a V8.

  7. Here’s how GM’s global lineup will look in a few years.

    Chevrolet: Entry level. This is the car you buy if your current car is on fire and/or being towed to the junkyard. Every car in the range is positioned below its nearest competition. The only exception is Corvette, but that’s a separate brand outside of the US.

    Buick: Upper-mid level. There’s a big push toward premium cars in all markets (the C-Class and 3 Series are #1 and #2 for mid-size sedans in the UK, well ahead of any Ford or GM product). This will be GM’s profit center. Buicks may be re-branded as Opels in Europe if the Opel brand is salvageable.

    Cadillac: Luxury. GM will once again try to compete at the high end with this brand. This will fail in Europe, but it could work in China and other emerging markets.

    I don’t see much future for other GM brands. GMC will survive in the US, and Buicks may be branded Opel in some markets, but they will not be distinct brands.

    What does this mean for Holden? Expect more Opels and Chevrolets in Holden dealerships. Before you know it, GM will only offer a couple of models under the Holden brand (Ute and Commodore). During the next “global automotive crisis,” GM will announce that Holden is going the way of Oldsmobile. People will blame GM for not investing more in the brand, not realizing that this was intentional.

    1. I’m not quite as ‘gloom and doom’ as you are, but I will say that I agree that the Opel brand doesn’t have a huge future even if GM keeps it. They may as well start killing it now and replacing it with something that stands for more than ‘average European car’. Unless.

      Unless GM is willing to actually let Opel build Corvettes. Not literal Corvettes, but Opels with the Corvette underpinnings. Hmmm…. what car would fit that bill….it is also a luxury car…. hmmm…I have it! The Cadillac CTS Coupe. I am dead serious: if Opel were allowed access to that parts bin (and they should have access), then Opel could survive. It wouldn’t be easy.

      1. I could bet that GM would have more success in raising Opel’s image than to re-introduce for the err fifth time cadillac, or start with something completly new. All it takes is good luxury cars and 10-15 years. The should start by offering the Saab 9-5 as an Opel Omega. Look at Audi. They were known for average, dull and boring cars. Than, Volkswagen decided to move them upwards. First with the Audi 200, than the V8 (still the same body as the 100), then the A8. After that car eventually became succesful, Audi was getting recognised as a competent manufacturer. Combined with the development of the TDI engines and the quattro, they started to surge to the level they are now at.

        1. The Western European luxury market is a lost cause. The three German brands have it locked down, and the crumbs go to Jaguar-Land Rover. Everyone else (Japanese, French, Italians, Koreans, Swedes) has been trying to crack that nut for years, but the market is dominated by German customers who are very nationalistic. Eastern Europe is much more open, and Cadillac can do well there. Picture an armored Escallade and a fully loaded Insignia. Which one closely matches our preconceived notions of Russian luxury?

          The Opel brand was tainted by the auto crisis. European used to think that their GM was different from American GM, but no longer. I don’t think that Opel can recover now that Germans don’t see it as a true German brand. They are doomed to selling on price, which makes them no better than Chevrolet. That being said, I’m also convinced that GM will keep pumping money into the brand for the foreseeable future, so they won’t disappear for a while.

  8. “President Obama devoted his Saturday radio address to one of his top election issues, the recovery of the American auto industry.” – USA Today

    And, that’s the US Auto Industry, ie GM, etc.

    Just a thought.

  9. I am 46 years old and want a sensible hot rod. Holden and Chevrolet just have to manufature three or four years worth of the Holden VF/SS aka Chevrolet SS so I can have a family sedan with a roomy back seat, a useful trunk, a tire melting V8 and traditional manual transmission.

  10. I think the Australian federal government would not hesitate to bail out Holden and keep it afloat. It’s such an icon and symbol of industrial presence in the country.

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