parking lot....too funny


##########################


Copyright 2001 The Detroit News, Inc.
The Detroit News

April 15, 2001, Sunday

SECTION: Front; Pg. 11

LENGTH: 857 words

HEADLINE: Caddy faces acid test in Europe
Consumers balk at stodginess, demand diesels and stick shifts

BYLINE: Daniel Howes; The Detroit News

DATELINE: FRANKFURT, Germany

BODY:
FRANKFURT, Germany -- The big test for Cadillac's push onto the global stage will come at places like Gregor von Opel's dealership,
far from its Detroit roots.

Here in Frankfurt, where rivals Audi, BMW and Mercedes-Benz dominate the premium car market, General Motors Corp.'s tarnished
luxury brand needs to prove that it can be a credible alternative to the autobahn machines prowling the Bockenheimer Landstrasse
here.

It may be an impossible task.

"They have to polish their brand," says von Opel, who owns Cadillac dealerships in Frankfurt, Erfurt and Wuerzburg. Germans "say
it's a car from the States and it cannot be as good as a BMW or Mercedes. Inside, there's a lot of plastic, and Germans don't like
this."

That's not all. As Europe's bellwether luxury car consumers, Germans expect Cadillac to offer diesel engines across its expanding
lineup. They need a range of low-displacement engines, not just a V-8 Northstar cranking out 350 horsepower. And they want the
freedom to order a manual transmission, unknown to Cadillac for decades.

Once regarded as the king of American luxury, GM's blueprint for a revitalized Cadillac envisions greater sales success in Asia, Latin
American and, most importantly, Europe. It may be the steepest hill Cadillac must climb if it hopes to fulfill its aspiration to
become a global luxury nameplate.

"It's a very difficult challenge," concedes Michael O'Malley, Cadillac's general manager. "The volume and strength of this brand is
primarily in the United States and North America. But for this brand to grow and be viable, we have to be global. I don't think
there's a choice."

Last year, arguably the best year in history for luxury car sales in Europe and North America, Cadillac sold just 931 cars in Europe,
down 11.4 percent from the 1,051 it delivered in 1999. Cadillac's high point here over the past five years was 1998, when it sold
1,297 of the all-new Seville sedan.

Given such minuscule sales, it is perhaps understandable that such critics as Susan Jacobs, a luxury car market consultant, call
Cadillac's global push "a foolhardy exercise. I don't see how an automaker that can't understand customers in its own market can
go into another country and be successful."

Undercutting Cadillac's chances for success in Europe is an image rooted in 1960s American glamour, when cars were big, pillowy
machines powered by fuel-hungry V-8 engines. Even a move into endurance racing and the latest generation Seville, touted as a car
engineered for finicky European consumers, did little to change that image in the eyes of most European consumers.

Cadillac "has Stars and Stripes written all over it," says Jeffrey Hurlbert, vice-president of sales and marketing for GM Europe. Its
image "sure isn't diesel and it sure isn't European-sized."

In no region of the world does Cadillac sell fewer cars than in Europe, the heart of a growing global luxury car business that
promises fatter profits. That's why GM is focusing key pieces of Cadillac's portfolio on European demands -- manual transmissions,
diesel engines and crisp interior packaging. Without them, GM's hopes for Cadillac in Europe are likely to remain unfulfilled.

For all the professions that Cadillac represents GM's global aspirations, the brand remains a subject of intense internal debate. GM
executives are weighing Cadillac's demand for diesel engines in its coming small luxury car, the CTS, against the comparatively
small sales volumes a diesel version is likely to deliver. Yet diesel engines are crucial to gaining the respectability in Europe that
GM says it seeks.

The automaker also is exploring ways to improve distribution of Cadillacs, typically sold through GM's Opel dealerships on
continental Europe and Vauxhall stores in the United Kingdom. GM is refining a plan that would combine Cadillac and Saab sales in
upscale dealerships separate from Opel and Vauxhall stores.

Also under discussion is the possibility of forming GM's answer to Ford Motor Co.'s Premier Automotive Group, the collection of
luxury brands that includes Jaguar, Lincoln, Volvo, Land Rover and Aston-Martin. GM's approach would bundle Cadillac and Saab
with Alfa-Romeo, owned by GM partner Fiat Auto SpA of Italy.

The group, in a clear reflection of Ford's effort, would aim to combine marketing, distribution and, eventually, some engineering
functions. But obstacles loom, including the European Union's anti-competition rules that appear to preclude certain types of
commercial cooperation between Fiat and GM brands.

More important to Cadillac's near-term prospects in Europe will be the all-new CTS, the replacement to North America's Opel-based
Catera that comes to U.S. showrooms next winter and Europe next spring.

The sedan will be positioned in a crowded segment that includes the BMW 3-Series, Mercedes C-Class, Audi A4 and the latest
entry, the Jaguar X-Type.

"The No. 1 thing we have to get right to be in the club is quality. And quality will be determined by our ability to execute," O'Malley
says. "I know I have to have quality equal to Lexus, Mercedes or BMW, and right now, I'm not there."

GRAPHIC: "They have to polish their brand," says Gregor von Opel, who owns Cadillac dealerships in Frankfurt, Erfurt and
Wuerzburg, on the car's chances for European success.; Bernd Kammerer / Associated Press

 

Caddys in Europe will never fly, the idea is already DOA.

 

On the plus side, no bad DV's in Northstars.