GM, like its Detroit siblings, will continue to feel the pinch of economic woe within the US economy (see previous post). So, as with many multi-nationals across most sectors, as US operations “re-align for tomorrow”, there has been distinct focus upon growth expectation and reliance within developing regions. Rebound from the tiger economies crash of 1998 and the emergence of China and India have demonstrated the power of East vs West, and some feel may have perhaps taken up a disproportionate share of senior management’s focus in many a corporation. But rewards only come after hard work, as GM’s previous efforts of buying into, turning around and exploiting the Daewoo/GM-DAT division demonstrate, now paying-off handsomely.
In the middle ground, economically and geographically, is of course Europe, with essentially very fragmented characteristics if we observe W. Europe market dynamics vs E.Europe and of course the nature of car-buying demands of consumers themselves. Whilst the socio-economic effects of European integration and globalisation have started to re-balance the previous stark differences, the automotive old-guard, GM the archetype, have had to consistently re-assess operational strategies and critically brand and product offerings.
Detroit’s Big 3 have historically always played-out different strategies on the world-stage, ‘The General’ always concerned with maintaining volume and scale, less adventurous in product designs, and keen to stand in the middle-ground of conventionality. But Where as Alfred P Sloane recognised the need to offer a ladder of brands in the US in the 1920s, that recognition was starkly lacking throughout the 1980s and 90s in Europe, Ford’s previous efforts with the previous PAG, demonstrating GM’s lack of foresight. (GM, as stated, was quietly nurturing Daewoo whilst PAG had the spotlight).Whilst times have changed, and along with them Ford’s strategic direction, it has oft been commented that GM Europe, given its leverage, does suffer from a lack of brand-scope. Detroit may have been keen not to repeat the inefficiencies experienced of decaying (and discontinued) US brands, and so have kept GME limited to the 2 primary core marques plus SAAB and the ‘re-energised’ Cadillac
It is this latter ‘migratory’ brand that has for what seems eons to have caused periodic optimism and despair within the European context. Whilst at home Cadillac has experienced its fair share of lacklustre, if not slated, products (esp Cimarron, Allante) the periodic escapades into European territory consistently disappointed, low volumes sold through independent distributors across Germany, Holland, Switzerland etc. Infact, the buyer types of Cadillacs in Europe were viewed/stereotyped as modern-day ‘Spivs’ or aspirant but failed older playboys desperate for kudos and social prestige, which understandably socially invisibly tarnished the American brands reputation. But beyond this, a primary factor was the European expectation of what a Quality Premium car should deliver…Cadillac was never really in the running. Thus over the years the European industry has watched Cadillac’s European Invasion Campaigns come and go.
But in recent years, given the squeeze on US sales, GM has once again decided to pitch for Europe, this time maximising platform synergies with SAAB and Opel to assist mutual business cases and so provide ‘dedicated’ product for Europe which also allows for an extended smaller car model line for North America; as probably anticipated. The corporate push witnessed today, is perhaps GM’s greatest effort at getting the American brand accepted, as it psychologically associates with the Chevrolet brand expansion.
This, fortunately or unfortunately, comes on the back of a previous youth-orientated popularity for the full-size Escalade SUV that started within the Gangsta & R&B music fields and became notorious as a music-video prop. This exposure gave Cadillac a new ‘edge’, bringing the brand back into a niche area of the mass-popular consciousness. Like the reputation gained with European ‘Spivs’ just how accordant it is with Cadillac’s own brand-orientation desires is debatable, pros and cons with the route of re-emergence.
To European eyes at least, the hard-edged, angular ‘Stealth’ aesthetic is an alternative to the far more sophisticated surface treatments of other aspirant and premium brands. In the US of course it has become absorbed since its shocking introduction in 1999 through concept cars and importantly avant-garde films like The Matrix. Cadillac Europe must be hoping that the linearity of their cars could catch on as it did with Jeep’s Cherokee in the early-mid 1990s in Europe, but given the lack of a similar social trend impetus and some say jarring visuals, this ambition may be rather optimistic.
As of today, the apparent GM commitment to Europe is clear, specifically developed model(s) to suit size and driving requirements of Europeans, with for the first time, all of its UK cars reportedly now with right hand drive. While the onus is on European dealers to shift metal, now that there is an ‘expansive’ 5 vehicle line-up, the industry and investors recognise that in truth it is only the beginning of what has to be a sustained campaign that must be supported across all marketing fronts if the brand is to find a modicum of favour. Getting to this point has been a major achievement for GM, including no doubt political disputes within the GME engineering base relative to project cost absorption for the ‘adapted’ BLS. Of course such friction is a small pain for the Renaissance Centre seniors who have global ambitions for the once revered brand, especially pertinent to act quickly when the likes of Nissan’s Infiniti brand seeks to join the premium sector party, the competitive threat of which is all too obvious.
But has it acted too quickly in its desire for geographic spread? Main concerns are product integrity and model name recognition and connotation. Whilst product quality has undoubtedly improved the European auto-press still rates Cadillac lower across many measures, and perhaps more importantly, the European premium buyer can’t (yet?) position Cadillac within their own frames of referance – “truly individual or odd-ball”? And remember, aspirant car-buyers are amongst the most conservative and cautious relative to what the neighbours, fellow colleagues or squash-club members may think.
For that reason the C segment BLS is a very important benchmark of the brand’s credibility within Europe and especially in the UK & Germany where a disproportionate of premium cars are sold. As for CTS and STS cars, although size-wise different, their generic graphic similarities may be misunderstood by European buyers, wondering why 2 sizes of what appears the same car are made available; since no-one has done that since BMW did with it’s 3,5,7 series since the late 80s. Of course there is perhaps greater hope for the cross-over SRX, but relative to the Germans, Land Rover and Japanese and the fact that focus is on smaller sized CUVs (eg Q3, X3, GLK) it is oversized and part of a diminishing larger cross-over segment. Lastly is Escalade, which will probably sell relatively well and hit low volume targets given the cache in certain circles, but it has visually softened which doesn’t help its image and in reality although very good on a per unit margin basis, lacks the volume to be a true income provider.
GM obviously hopes Cadillac will start playing an increasingly important role in GME’s revenue stream, but it still has a long way to go (perhaps 5-10 years) before the marque is taken seriously. And it will have to adapt if it wishes to remain in the running, especially so in the question of size and fuel-efficiency in today’s ever so carbon-sensitive social and economic atmospheres. But here comes the rub.......small Caddys have historically been the faltering-point for the brand so is a small Cadillac essentially an oxymoron? (Especially given the recent emphasis of ‘Big and Brash’ by Escalade). Big car persona in increasingly more compact dimensions? This can be done with monobox packaging, but doesn't that fly in the face of Cadillac's big-car/3 box silhouette?
It’s an oft re-visted hypothesis by GM that theoretically the division could eventually make a major contribution as a global player; but getting it to that point has proved elusive to date. Indeed, even its standing as a true premium player in the US market was lost years ago, so, playing devil’s advocate, what exactly does Cadillac stand for today, and what values are GM actually exporting? It’s an answer lost to many.
The ‘Art & Science’ design philosophy that sits behind the near decade old styling was pertinent in re-inventing Cadillac and extending its connection to a more youthful audience (beyond the traditional grey-market) within North America. GM must now seriously consider how it approaches that yet another re-invention for the world at large, since whilst there may be a major distribution push underway, without a robust, meaningful message and a crop of more (philosophically not necessarily technically) advanced cars the substantial efforts seen thus far could readily flounder.
It may seem a stretch given their rivalry, but if Cadillac and subsequently Lincoln do decide to play permanently on the European and world stages, then they should demonstrate exactly what ‘American Luxury’ (to use Lincoln’s design phrase) stands for. Ironically Lincoln’s recent brand philosophy re-orientation was based on the original 1960s re-interpretation of European Luxury. It was at that point that Cadillac’s chrome & big-tailfin iconography died out to be replaced by Lincoln’s more tasteful and successful clean-linearity and de-cluttered detail. Today perhaps the 2 brands should discuss how they could individually represent both sides of the same American coin…or perhaps $100 Bill.
Business and social surveys suggest that the global public’s perception of ‘Brand America’ is at an all time low. But a new dawn is emerging within the American socio-political consciousness, and developments are being closely watched by the rest of the world. Perhaps too GM could utilise this probable new era of change to export its own relevant Modern-Americana message? That may seem a far fetched basis for brand management – but it highlights the need to re-represent itself in what is possibly a broadly hostile competitor & consumer environment. It must endeavour to produce new image & PR formulas that may appear radical but that capture old and new personas of the marque.
investment-auto-motives believes Cadillac can plant new roots in Europe and beyond, but it must be far-sighted and creative in how it reaches the heart of new buyers. That may mean radical initiatives beyond compass-bearing concept cars, being seen to be on the streets as something very unique, with perhaps the creation of a select Cadillac Club with lifestyle connotations and fringe benefits. At its root, it must be about far more than the historic demands of Detroit to swim unprepared against a strong tide. All good swimmers know to swim (think) laterally across the unbeatable currents and riptide.
Finally to add yet another metaphor, comparing Cadillac’s European campaign to that of the British forces’ WW2 European efforts may appear to stretch the sentiment, but to quote Churchill:
“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."
And that is what Wagoner, the GM Board and Cadillac managers must recognise.