Cadillac made
headlines this week with its new plan for western
European sales, but the real news lies elsewhere: China
and Russia.
The rapidly
growing markets already account for far more Cadillac
sales than western Europe does, and the brand is primed
for more growth this year. Cadillac plans to eventually
boost sales outside the United States to 30 percent of
its total volume, double today's level.
Cadillac sold
128,727 vehicles around the world last year. That's
about one-eighth the total for luxury-car leader
Mercedes-Benz. Cadillac has no aspirations to
million-plus sales, but it must grow dramatically to
compete with global powers like Audi, BMW, Mercedes and
Lexus.
Cadillac's
model line and brand position make Russia and China the
best candidates for growth over the next few years,
global marketing director Jim Vurpillat said. The
Mideast, where Cadillac has been strong for decades, is
its other main market outside North America.
Sales in China
and Russia are small now — 7,265 and 1,529 in 2009,
respectively. However, each already exceeds western
Europe, where German brands' large sales networks, model
lineups and strong images give them a huge advantage.
Cadillac sold 1,128 vehicles in western Europe last
year. Its sales never approached the ambitious
20,000-a-year sales goal Dutch distributor Kroymans set
when it became Cadillac's European distributor in 2003.
Cadillac's
aspirations were crippled by a model line badly out of
sync with European tastes. The lack of first-rate diesel
engines effectively shut it out of half the market,
while its SUVs left buyers cold.
None of that
applies in China and Russia.
Neither country
cares much about diesels, and both appreciate Cadillac's
crossovers and SUVs. GM has handled Cadillac sales
itself since launching the brand in China and Russia in
2004 and 2006, respectively.
"Chinese
demand is off the charts" for the new SRX
crossover, Vurpillat said. "It'll be 40 percent to
50 percent of our sales there this year" and
dealers are howling for more, he said. Chinese sales
could almost double to 12,000 to 13,000 this year thanks
to the SRX, he said.
China eclipsed
Canada to become Cadillac's largest non-U.S. market last
year, and Vurpillat said it shows no sign of slowing
down. Cadillac has 40 Chinese dealerships and plans to
add about 10, with more to come as the brand moves
beyond megacities like Shanghai and Beijing.
The Escalade
large SUV is Cadillac's best seller in Russia, where
buyers appreciate its size and security. The smaller SRX
is off to a strong start there, too.
"We expect
Russian sales to be up by at least double-digit
percentage points this year on the strength of the SRX,"
Vurpillat said. Cadillac has 26 Russian dealers.
Unlike the
brash approach that previously failed in Europe,
Cadillac now aims for gradual, consistent growth,
Vurpillat said.
"We'll do
it in a measured fashion," he said. "We don't
want to pursue growth at the expense of the brand."
While China and
Russia should provide most sales growth, Cadillac's new
European initiative will focus on the brand's
prestigious, high-performance V-series models. The
stylish CTS sport wagon should also appeal to European
buyers, who love wagons nearly as much as they do
diesels. Cadillac will cut back from a Kroymans-fueled
high of 165 European dealers to 35 or 40 in key markets
like Germany, Switzerland, Italy and luxury-oriented
cities like Paris.
"These
things require time and patience, especially in the
luxury market," Vurpillat said. "We're going
to do it the right way."