New-look Cadillac Takes on Europe's Best

DUESSELDORF, Germany, Aug 31, 2004; Michael Shields writing for Reuters reported that standing the stereotype of a fat-cat American car on its head, Cadillac is trying to muscle its way into Europe's premium automobile segment as the ride of choice for well-heeled non-conformists.

Dare to be different is the message General Motors Corp.'s luxury brand is sending European shoppers spoiled by upmarket cars from local champions such as Mercedes-Benz, BMW, Porsche, Jaguar or Ferrari.

"Nearly every taxi driver has a Mercedes," sniffed Karl-Friedrich Bussmann, 42, a customer service training specialist near Duesseldorf who recently bought his first Cadillac, a six-cylinder CTS sedan.

"People ask you about it when you are at the petrol station, and that never happened with my old car."

But GM and its European marketing partner Kroymans Corp. have their work cut out to mimic Cadillac's rebound in America, where they used rock stars Led Zeppelin to advertise its cutting-edge look to the baby-boomer generation.

Cadillac has to shed its earlier image of building land yachts that are simply too big and thirsty for European drivers.

"What we really need to achieve is a brand breakthrough in the image," said Gerard Jansen, chief operating officer of Cadillac Europe, stressing the brand had to be creative and different if it wanted to fight European premium manufacturers.

"It's chic and expensive, but it all is linked to the image of the 1950s, the Elvis Presleys, the Marilyn Monroes, the big cars, the bedrooms on wheels almost, and that is an advantage and a disadvantage," he said, adding that the legacy was at odds with Cadillac's rejuvenated look and feel.

FIND THE HOT SPOTS

Analysts like Michael Raab of Bank Sal. Oppenheim are not convinced that Europeans can so easily forget Cadillac's reputation for churning out gas-guzzling dinosaurs.

"They have to make clear to their customers that these days are over, that we are talking about high-tech limousines that are by no means comparable to the ones with tail fins you remember from 20 or 30 years ago," Raab said.

"It is certainly a nice endeavour, but I am doubtful whether it will ever be crowned by success," he added.

Having spent millions on advertising in upscale magazines, Kroymans is set to launch a "hot spot" marketing campaign that will send small fleets of its new SRX crossover sport utility vehicles to high-profile events such as the Milan fashion week and the polo championships in the Swiss resort of Gstaad.

It is also creating special showrooms for Cadillacs and Corvette sports cars rather than selling them via the mass market Opel network, as happened before the Dutch group got the European franchise for Cadillac last year.

"You would come into the dealership and find the Cadillac standing next to an Opel Corsa," Jansen said. "I don't think that is really the premium-brand experience you want to provide your customers."

Kroymans aims to open 25 Cadillac and Corvette "experience centres" in European cities by 2008, of which seven will be operating by year's end. It has 69 Cadillac and Corvette dealers now, set to rise to 100 by year's end and eventually to 200.

NO DIESELS?

At the Cadillac dealership in Duesseldorf, general manager Werner Kirck pitches the cars as a chance for buyers to stand out from the crowd at a competitive price.

"As far as its equipment, comfort and quality go, it does not have to take a back seat to European manufacturers," he said, noting he had sold 30 Cadillacs since the start of July.

Typical customers used to be Lufthansa pilots or business people who spent time in America, but "we're suddenly selling to people who never had contact to GM or Cadillac", Kirck said.

One drawback is a lack of diesel engines that Europeans like. More than 40 percent of cars sold in Europe run on diesel.

Jansen said diesels should be available "in the foreseeable future", but added the first priority was to show GM that Cadillac sales were on the rise in Europe.

GM aims to sell 10,000 Cadillacs a year in Europe by the end of the decade -- up from 791 last year -- despite the expected initial losses that Kroymans is budgeting.

Cadillac's Jansen wouldn't comment on whether GM plans to build a smaller Cadillac to complement its CTS and STS sedans, XLR roadster and SRX crossover, but said he would welcome this.