Cadil­lac’s back

The BLS is far from a Yank tank

Finweek English Edition - - Business strategy - FRIK ELS

APRIL WILL BE the first full sales month for Cadil­lac in South Africa. Gen­eral Mo­tors SA sold more than 87 000 new ve­hi­cles last year, mostly Opels and Chevro­lets, and Cadil­lac won’t add much in terms of vol­ume. How­ever, the re­turn of Amer­ica’s best-known lux­ury ve­hi­cle would be a big test of the abil­ity of US au­tomak­ers to take on the Euro­pean play­ers in the most com­pet­i­tive seg­ment of them all – the com­pact ex­ec­u­tive.

Cadil­lac’s base­line model – the BLS – goes head to head with the BMW 3-Se­ries and the Mercedes-Benz C-Class in SA. There can’t be many places out­side Ger­many where both mar­ques have a stronger hold on the seg­ment. Even with the C-Class in its fi­nal months be­fore the new model ar­rives, it sold just un­der 1 200 units in March. Usu­ally dur­ing a so-called run out, sales drop dra­mat­i­cally as buy­ers hold out for the new ve­hi­cle, par­tic­u­larly at this lux­ury end of the mar­ket. March was also a dis­ap­point­ing month for pas­sen­ger cars, with to­tal sales de­clin­ing just un­der 4% year-on-year.

The 3-Se­ries ended 2006 in sixth place over­all, with sales of 16 572 units in SA, one place above the C-Class. To put that in per­spec­tive, Cadil­lac ex­pects to sell only 10 000 units across its en­tire range in the whole of Europe this year.

Cadil­lac pre­mium chan­nel man­ager Alf Ben­nett won’t dis­close sales tar­gets for SA but hopes to chip away at the es­tab­lished names with mar­ket­ing cen­tred on of­fer­ing some­thing dif­fer­ent. That’s a shrewd strat­egy. In a mar­ket look­ing for ex­clu­siv­ity, the very suc­cess of the 3-Se­ries and C-Class over many years is be­gin­ning to work against them.

The Cadil­lac BLS sold in SA is built in Swe­den on a Saab plat­form, GM’s other lux­ury brand. Cadil­lac first launched the BLS in Europe a year ago and has not lost sight of Euro­pean tastes, in­clud­ing a diesel model (only the sec­ond since the Sev­en­ties) in its line-up and for the first time in the com­pany’s 104-year his­tory, a sta­tion wagon (not avail­able in SA).

Ben­net says the in­tro­duc­tion of the im­pres­sive Cadil­lac SRX sport util­ity ve­hi­cle (which is al­ready avail­able) was brought for­ward, and the BLS’s big­ger brother – the STS – will be here by the third quar­ter.

Cadil­lac will be sold along­side Saab and Hum­mer in five new R10m deal­er­ships, grow­ing to 10 next year. Says Ben­net: “SA is among the first mar­kets where GM has grouped th­ese brands to­gether un­der one ban­ner. This approach will be ap­plied in other small and medium-sized mar­kets around the globe.”

Last year 250 000 Cadil­lacs were sold world­wide, with its home mar­ket ac­count­ing for the vast ma­jor­ity.

GM SA must have watched Toy­ota’s rein­tro­duc­tion of its pre­mium brand into SA closely. Last year roughly R200m was spent by Toy­ota on ded­i­cated Lexus deal­er­ships and ser­vice cen­tres. For that, Toy­ota has reaped be­tween 260 and 280 sales/month.

In con­trast to Lexus, Cadil­lac en­ters the SA mar­ket at a time when the in­dus­try is hop­ing for a soft land­ing af­ter three years of record growth. If Cadil­lac can match the per­for­mance of the Ja­panese brand from the start, it will have done well.

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