Cadillac's Global 4.0 gambit carries cautionary tale from Euro veteran

An old contact from my days as a European correspondent reached out with musings prompted by Thursday’s column. His wisdom should be required reading inside Cadillac and across the big offices atop General Motors Co.’s Renaissance Center, starting with CEO Dan Akerson. Here, in its entirety, is Mark R.’s take on Cadillac Global 4.0 from his perch in London:

“I am 50 and have now witnessed 4 Cadillac launches in Europe starting with the original Seville in 1976-1979 and on through the stubby little Seville STS in the late 80s, the STS sedan in the early 90s (I still own a ’97 STS sedan here in Europe) and on to the Art & Science relaunch, first with Kroymans, failed, and then again under Cadillac Europe where they have sold fewer cars than Lamborghini – that takes some doing.

“I know exactly why they have failed but no one bothers to ask me.  And I should know – I don’t think there are any other Americans that own four late model Cadillacs in Europe.  Beyond my aforementioned olde STS, I garage in Rome an ’07 Escalade, an ’08 STS-V, an ’09 XLR and at the end of the month I am picking up my Opulent Blue Metallic CTS-V from the Cadillac dealer in Luxembourg.

“I have kept all the Automotive News, Detroit News and various car magazine articles on the famous sales predictions from Grettenberger et al on the always imminent sales success of Cadillacs in Europe.  All of them, just like the latest ATT executive, brimming with convincing optimism on how they are going to conquer the European and global markets.

“Fail!

“And why do they continue to fail when Lexus is selling 40k+ vehicles a year and has recently announced that they will be profitable in Europe within two years?  And Infiniti, which only launched in Europe three years ago and is already selling 6k plus!  I’ll tell you why:  General Motors and Cadillac have no conviction and the potential customer base in Europe can smell it.  They have seen Cadillac come and go many times already and they have been right.  And all of this notwithstanding that neither Lexus nor Infiniti have anywhere near the pedigree of Cadillac – and yet they have succeeded and Cadillac has failed.

“Beyond the executive suite revolving door, the vehicles suffer from the continued perception that they are poor riding gas hogs.  They are not poor riding anymore but they are still, on a relative basis, gas hogs.  The CTS V spews out 360 g/km in CO² emissions against 232 g/km for the BMW M5.  Because of the new tax bands around these emissions, these things count.  Furthermore and most importantly, big engines are rarely purchased by middle class and blue collar drivers in Europe.  It is just too expensive to fill up the tank at $10/gallon.  And in countries like Italy and France the annual registration tax on a CTS-V is now $6-8k a year!

“That means that the purchase of a car that lists for $125,000 better keep its residuals.  Unfortunately a CTS-V would be worth 50 percent of that price the day after it leaves the showroom.  Only the crazies, like me, would buy these cars.  And CTS-V excepted, I bought all my Caddies in the US and so avoided the onerous taxes.   And although the cars keep on getting better and better their interior quality (perceived and otherwise) is still not up to the standards set by the German troika.

“And Cadillac executives should not be too smug about their success in China – firstly, they were there before the Germans but they now sell 1/12^th the number of vehicles that Audi/Mercedes and BMW sell.  And I do not read anywhere that they are closing that gap.  I was in Jakarta in May, Sydney in August and Hong Kong in September.   In these three RHD cities I saw not one Cadillac but many German sedans and Italian sports cars plus the usual panoply of ex-British metal like Jaguar, Bentley and Rolls.  If they want to succeed around the world they will have to succeed in Western Europe.  Even the Chinese will never give Cadillac its due until they earn the cachet of Europe.  And that is kind of hard to achieve when you sell 20 cars a year in the UK and not much more than that in the other countries of Western Europe.

“You are right about Bob Ferguson though.  He needs to understand why they have and continue to fail; read up on the history of the marque; read the history of the Nairn Way – very prescient given the turbulence in the Middle East today; ask customers who drive Cadillacs in Europe what works and what does not; and be intellectually curious.  Does he even own a passport?

“Anyway, we shall see but I have my doubts.  It’s a shame though – these big torquey engines are an absolute blast to drive in Europe.  Last week I drove my XLR from Rome to Munich for Octoberfest.  I stayed two days, drank way too much beer and then on Saturday drove back to Rome in 9 hours at speeds that touched 230-240 kmh.  True grand touring.”

Yes, this guy is for real — Detroiter to the bone, car-lover extraordinaire, self-confident enough to live the European life from behind the wheel of American metal. He gets around; he has perspective; and he wants, desperately, for Detroit to beat the Europeans at their own game. All of which makes his perspective worth heeding, Bob, closely. Am sure he’d fancy a drink next time you’re in London.