Cadillac's Euro reboot may have implications for US models, sales

[mzziaz]

Vauxhall is a British brand (owned by an American corporation) and the Astra is a European designed and built car.  It's not an import by any stretch.

All true, but the premise was that GM couldn't sell a car in Europe even if it was 100 times better than a Golf.

[12,000 RPM]

Sorry, but you are so blatantly wrong.

About what?

[mzziaz]

About what?

About the euro car market.

[12,000 RPM]

About the euro car market.

So Cadillac has a future in Europe? Based on what? Everything I'm seeing says no. UK buying a lot of Corsas has nothing to do with Cadillac succeeding all over Europe.

[mzziaz]

So Cadillac has a future in Europe? Based on what? Everything I'm seeing says no. UK buying a lot of Corsas has nothing to do with Cadillac succeeding all over Europe.

Caddy havent had competetive product in Europe for 40 years. If they fix that, they might have a shot, although it is going to be tough without a dealer network.

GM sells a million cars a year in Europe, while Ford is the second best selling brand on the continent, so clearly it is possible for US manufacturers to sell cars in the marketplace.

[12,000 RPM]

Caddy havent had competetive product in Europe for 40 years. If they fix that, they might have a shot, although it is going to be tough without a dealer network.

GM sells a million cars a year in Europe, while Ford is the second best selling brand on the continent, so clearly it is possible for US manufacturers to sell cars in the marketplace.

Eh so market share wise in the mainstream they are doing decently. But EU registrations have been dropping every year and cultural/political trends don't bode well for car growth there. So even with the market share the long term trends still make investing in a non European luxury brand for Europe a not very smart proposition. Better to build cars for car friendly & car buying regions and abandon the rest.

[ifcar]

Even without growth, there were still 12 million cars sold last year in Europe. The pace isn't exactly plummeting, either, with drops of one percent a year or so. There are still lots of people in Europe and lots of people who want to own cars, even if their numbers are declining slightly.

[Rupert]

Apparently, sporty wants multi-million dollar decisions to be based on "feelings" about the market.

[12,000 RPM]

Even without growth, there were still 12 million cars sold last year in Europe. The pace isn't exactly plummeting, either, with drops of one percent a year or so. There are still lots of people in Europe and lots of people who want to own cars, even if their numbers are declining slightly.

Its more like 5% a year since 2007.

Apparently, sporty wants multi-million dollar decisions to be based on "feelings" about the market.

Any decision made on what someone thinks is going to happen in the future is ultimately made on "feelings". In this case GM is going forward with Caddy in Europe because it "feels" like the ATS/CTS are what Europe wants. I'm seeing things that say otherwise. Either way we are all trying to predict the future; don't knock me because I see a future different than you.

[MrH]

Naw homie. Tons of analytics goes into it too.

[ifcar]

Its more like 5% a year since 2007.

That's not correct. Sales fell sharply during the recession in Europe just like everywhere else, and then as they started to increase in the U.S. the decline slowed in Europe. In fact, I believe several recent months have shown increases year-over-year.

[12,000 RPM]

Naw homie. Tons of analytics goes into it too.

Analysts can and have been wrong. Ultimately it's still a forecast/prediction so it will never be 100% accurate. I'm sure Lexus and Infiniti didn't go into Europe expecting to fail as miserably as they do, even without the diesels. Plus I get the feeling that sometimes a company wanting to do something colors how they interpret or even gather data to help them make an "informed" decision. GM decided it has to compete with the Germans so they have to make a 3 and 5 fighter and gain legitimacy on the German's home turf. Regardless of whether that will be the move that helps them grow the brand through volume, profit and longevity. So even if the analytics point to some relatively decent outcome that doesn't mean the path chosen is the best one.

That's not correct. Sales fell sharply during the recession in Europe just like everywhere else, and then as they started to increase in the U.S. the decline slowed in Europe. In fact, I believe several recent months have shown increases year-over-year.

Maybe things have turned around very, very recently, but even still, general macro trends are pointing to a continued decline not just in car sales but miles driven and people getting licenses. It's especially prevalent in Europe and Japan which are more dense, better connected with public transportation, and increasingly expensive to own even a cheap car.

[ifcar]

Charts that cut off the Y axis overexaggerate differences. I would have failed my middle-school math test for doing something like that.

Sales are still nearly 12 million, and 12 million isn't so far off from 16 million that it means everyone needs to ZOMG NEVER TRY TO SELL A CAR THERE!

[MrH]

Analysts can and have been wrong. Ultimately it's still a forecast/prediction so it will never be 100% accurate. I'm sure Lexus and Infiniti didn't go into Europe expecting to fail as miserably as they do, even without the diesels. Plus I get the feeling that sometimes a company wanting to do something colors how they interpret or even gather data to help them make an "informed" decision. GM decided it has to compete with the Germans so they have to make a 3 and 5 fighter and gain legitimacy on the German's home turf. Regardless of whether that will be the move that helps them grow the brand through volume, profit and longevity. So even if the analytics point to some relatively decent outcome that doesn't mean the path chosen is the best one.



Maybe things have turned around very, very recently, but even still, general macro trends are pointing to a continued decline not just in car sales but miles driven and people getting licenses. It's especially prevalent in Europe and Japan which are more dense, better connected with public transportation, and increasingly expensive to own even a cheap car.

Just because analysts can be wrong doesn't mean these decisions are just gut reactions.

[Madman]

I think part of the problem here is that some of you are looking at Europe as a single, monolithic entity.  In reality, nothing can be further from the truth.  Germany is doing quite well and the UK has rebounded recently, but Spain, Italy and Greece continue to struggle.

Lumping the entire continent together while failing to account for regional variables is a fool's errand.

[mzziaz]

I think part of the problem here is that some of you are looking at Europe as a single, monolithic entity.  In reality, nothing can be further from the truth.  Germany is doing quite well and the UK has rebounded recently, but Spain, Italy and Greece continue to struggle.

Lumping the entire continent together while failing to account for regional variables is a fool's errand.

That is true. The Euro market is have enormous regional differences.

[cawimmer430]

Lexus and Cadillac have not adapted to the European market and their dealership network is non-existent. Infiniti is trying, but you can only get so far with V6-diesels. There is zero advertising from these brands on television or in most major magazines. You'll be hard-pressed to find a Lexus, Cadillac or Infiniti advertisement in a car magazine such as Auto Motor und Sport for example.

The lack of engine choices is definitely one of the major problems for these brands. Look at all the engine options you can choose for an Audi A1/A3, BMW 1-Series or Mercedes A-Class. Then walk into your local Lexus dealership (if there's one near you) and the only model sold in the CT class is the CT200h. That's it. The European brands have adapted their cars for this market. Our buyers want engine options and Lexus, Cadillac and Infiniti don't have 'em.

The LS is only available as what? The LS460 and LS600h? Where's the V6 diesel / gas LS? You're only going to reach so many people with an LS460 / LS600h. Diesels are very popular in the luxury flagship class - fuel economy and spirited performance in one package.

Then there's other things which make these brands so unappealing, like the lack of wagons for example. Wagons are more popular than sedans in virtually all niches - mainstream and luxury. Cadillac, Lexus and Infiniti have no wagons. None. And you can't even fold down the rear seats in a current Lexus GS to create more space (as far as I know from a review I read ages ago). Things like this, the lack of dealers and the lack of engine options kill their appeal. And lastly, history and heritage is important for many buyers when you're shedding out a lot of money for a premium car. Cadillac does have an advantage here compared to Lexus and Infiniti, but since they're not adapting to the European market, they won't be succeeding anytime soon.

[12,000 RPM]

Just because analysts can be wrong doesn't mean these decisions are just gut reactions.

Ultimately, a decision based on what you think will happen in the future is a gut decision. You have to trust that whatever predictions and past info you are relying on is valid and useful for the future. Companies like GM make very well informed gut decisions but ultimately they are still gut decisions.

And anyway someone at GM had to make the decision to even think about taking Cadillac to Europe and have analysts look at how they could do it. That was definitely a gut decision and a desire that could (and IMO has) overridden logic/empirical evidence.

[12,000 RPM]

Lexus and Cadillac have not adapted to the European market and their dealership network is non-existent. Infiniti is trying, but you can only get so far with V6-diesels. There is zero advertising from these brands on television or in most major magazines. You'll be hard-pressed to find a Lexus, Cadillac or Infiniti advertisement in a car magazine such as Auto Motor und Sport for example.

The lack of engine choices is definitely one of the major problems for these brands. Look at all the engine options you can choose for an Audi A1/A3, BMW 1-Series or Mercedes A-Class. Then walk into your local Lexus dealership (if there's one near you) and the only model sold in the CT class is the CT200h. That's it. The European brands have adapted their cars for this market. Our buyers want engine options and Lexus, Cadillac and Infiniti don't have 'em.

The LS is only available as what? The LS460 and LS600h? Where's the V6 diesel / gas LS? You're only going to reach so many people with an LS460 / LS600h. Diesels are very popular in the luxury flagship class - fuel economy and spirited performance in one package.

Then there's other things which make these brands so unappealing, like the lack of wagons for example. Wagons are more popular than sedans in virtually all niches - mainstream and luxury. Cadillac, Lexus and Infiniti have no wagons. None. And you can't even fold down the rear seats in a current Lexus GS to create more space (as far as I know from a review I read ages ago). Things like this, the lack of dealers and the lack of engine options kill their appeal. And lastly, history and heritage is important for many buyers when you're shedding out a lot of money for a premium car. Cadillac does have an advantage here compared to Lexus and Infiniti, but since they're not adapting to the European market, they won't be succeeding anytime soon.

It's a chicken and egg situation to some degree. Doesn't make much sense to build tons of dealers when you are selling cars in the double digit range each month. Likewise doesn't make much sense to dump money into new engines for cars nobody is going to buy. Plus keep in mind these companies are going for luxury... they don't want to compete with cloth seat manual window E180 CDIs; there's no profit in that.

And Caddy's H&H isn't European H&H.... so it doesn't really count. It's like trying to sell Budweiser in Germany. I am really just not seeing what the payoff is for the massive undertaking it would be for one of these non European luxury makers to really establish the dealer network and engine portfolio Europeans are used to.

[MrH]

Ultimately, a decision based on what you think will happen in the future is a gut decision. You have to trust that whatever predictions and past info you are relying on is valid and useful for the future. Companies like GM make very well informed gut decisions but ultimately they are still gut decisions.

And anyway someone at GM had to make the decision to even think about taking Cadillac to Europe and have analysts look at how they could do it. That was definitely a gut decision and a desire that could (and IMO has) overridden logic/empirical evidence.

Data driven decisions aren't gut reactions.

[12,000 RPM]

Data driven decisions aren't gut reactions.

We will have to agree to disagree. All the data I can find relevant to the ATS/CTS in Europe points to failure

[MrH]

We will have to agree to disagree. All the data I can find relevant to the ATS/CTS in Europe points to failure

The data they're considering isn't available publicly.  It's generated in house

[Galaxy]

All the data I can find relevant to the ATS/CTS in Europe points to failure

And to a large extent that is Cadillac's fault. Per their european website they have 7 dealers in Germany (granted that is a huge increase compared to a few years ago) and 3 in France. With that kind of dealer network how much success can they expect? I have been wondering for years why they don't simply have Opel dealers sell them.

[12,000 RPM]

The data they're considering isn't available publicly.  It's generated in house

You don't see the conflict of interest there? How that might generate "colored" data/models?

[2o6]

You don't see the conflict of interest there?

How is seeing if your product will do well in the market a "Conflict of interest"?

[cawimmer430]

It's a chicken and egg situation to some degree. Doesn't make much sense to build tons of dealers when you are selling cars in the double digit range each month. Likewise doesn't make much sense to dump money into new engines for cars nobody is going to buy. Plus keep in mind these companies are going for luxury... they don't want to compete with cloth seat manual window E180 CDIs; there's no profit in that.

It's rare to find a "stripper" E-Class these days. Even your most basic rental or taxi E200 CDI or E220 CDI comes loaded with amenities which the average driver desires: navigation, A/C, A/T, a sunroof perhaps etc.

Finding an E-Class with a manual transmission is extremely rare. It boggles my mind why Mercedes' even offers one in the E-Class (4-cylinder models only) when the take-rate is so low. Really low. Not even a blip on the radar.

And Caddy's H&H isn't European H&H.... so it doesn't really count. It's like trying to sell Budweiser in Germany.

The problem with Cadillac in Europe are three things:

1) Lack of dealer networks
2) Lack of engine options
3) Lack of proper models (small compact luxury cars, wagons etc.)

The average European knows about Cadillac. I'm sure that they think of a pink 1959 Eldorado with large fins when the name Cadillac is mentioned and if they know a little bit about cars.

Lexus and Infiniti? Most people have no clue where these brands came from. It will take a few years or decades before these brands can manage to build up some kind of prestige and branding in Europe - if at all.

I am really just not seeing what the payoff is for the massive undertaking it would be for one of these non European luxury makers to really establish the dealer network and engine portfolio Europeans are used to.

The European market is hard to crack due to many factors such as regional differences in tastes for example. Bigger luxury cars (S-Class, E-Class type size) can be sold in markets like Germany, Switzerland or the UK for example, but walk across the border into France or Italy and you'll see that cars like the A-, B- and C-Class are more popular due to their smaller size. It's little things like that which force manufacturers to develop and offer a broad spectrum of models and engine options.

What would really help Cadillac (Lexus, Infiniti etc.) are more models and more engine options as well as a decent dealer network preferably around/in major cities. But I doubt that they'll ever reach the popularity of local brands, so yeah, they are essentially wasting resources trying to break into the European market.

[12,000 RPM]

How is seeing if your product will do well in the market a "Conflict of interest"?

I see GM "asking" analysts for data to rationalize its desire to break into the Euro market like Ferdinand Peich "asking" analysts for data to rationalize the Phaeton. For all intents and purposes the decision was already made long before any empirical data got into the process. And I wouldn't be surprised if that confirmation bias corrupted their in house analysts' processes and results. Hell, you see it here. People say 'the ATS is a good car'- which it is. But that doesn't mean it will legitimize Cadillac in Europe, or beat the 3 here. Mr H keeps saying "the analysts"... if the case for Cadillac in Europe is so strong, why is there no birds eye view public data to corroborate it? Again, why would anyone pay BMW prices for a BMW imitator? What % of the 3 series market really cares about "driving dynamics"? GM is going for the wrong segments and regions based on what I think are very outdated metrics of success in the luxury market.

[2o6]

And what authority or insight do you have on this?

[MrH]

So because some of the data is generated in house, this is considered a "gut reaction"?  And because it's a "gut reaction", your opinion on it is just as valid as GM's?  I'm not following at all.

[12,000 RPM]

My point is, GM has been trying to push Cadillac into Europe and get Cadillac on "equal footing with the Germans" for over a decade now, so the idea that their plan/POV is wholly objective and data driven is wrong. There are definitely elements of pride that run counter to what is the logical thing to do, which is minimize losses and pull the fuck out, and focus on regions and vehicle segments of growth.

I mean Caddy sold 2200 cars in Europe last year... the whole continent. EU total car sales have been dropping 4-5% YOY over the last 6-7 years. The Germans Caddy is claiming to emulate are diversifying the hell out of their lineups well beyond the 3/5/7 sedan brand architecture. ATS has been well off the projections of analysts leaving GM having to put cash and incentives on the hood to get them out the door. Etc. etc. So again what is this data that is running counter to all of these realities of failure for the Caddy brand? Where for example is their baby CUV to tap into the sales of the segment of the Macan, Evoque, X1/X3, etc. etc.? They should have made one of those before the ATS. Maybe they will make one in 10 yrs