No. 744,
April 23, 2014

About The Autoextremist

After a more than two decade career in automotive advertising, Peter M. De Lorenzo founded Autoextremist.com on June 1, 1999 as a weekly Internet magazine devoted to news, commentary and analysis of the auto industry and the business of motorsports. Since then the site has become a weekly "must read" for leading professionals within and outside the auto and motorsports industries, and De Lorenzo is considered to be one of the most influential voices commenting on the business today.

De Lorenzo's latest book is Witch Hunt (Octane Press  witchhuntbook.com). It is available on Amazon in both hardcover and Kindle formats, as well as on iBookstore. De Lorenzo is also the author of The United States of Toyota.

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The Autoextremist - Rants


Monday
Mar032014

GM’s European folly.

By Peter M. De Lorenzo

Detroit. Hope springs eternal this week, or something like that, as the automotive media turns its attention to the Geneva International Motor Show, with the world’s auto manufacturers jostling each other for attention with their usual brace of show ponies and new production offerings designed to send the message that they do, in fact, have it goin’ on.

This annual rite of spring in the car business tends to bring out the best and of course the worst in these car companies, depending on the level of delusion and hubris in play. Some companies stay on point, displaying the focused consistency that got them to the level of success they enjoy today. While others flop and flail around, talking too much while making vacuous promises that can’t even remotely be fulfilled, in a remarkable dance of “selling air” that is still excruciating to watch even though it has been going on for years in this business.

And the behavior by some of these manufacturers is predictable, with the German car companies resolutely adding even more models to their already jammed showrooms, parsing segments with a scalpel just in case they might miss something. As they blithely go along thinking that this sort of product “strategy” is infallible and incapable of reaching the saturation point, it’s obvious to everyone but them that it already has.

But then again hubris and German auto executives go together like peanut butter and chocolate, and it is not only predictable, it really knows no bounds. And watching it is still a sight to behold, even though we’ve seen it all before time and time and time again. After all, the business would be dull and boring without German auto executives acting like the world revolves around them.

Despite their lengthy history of self-aggrandizement, however, the German auto executives are being challenged for supremacy in the delusional hubris department by that certain megalomaniac in charge of FCA, who clamors for attention every spring with myriad pronouncements that usually have a way of being derailed by two niggling little details: reality and the truth. But that’s okay, we have to wait until May – FCA’s Supreme Leader has to have everyone’s undivided attention after all - for the fourth (or is it fifth?) Grand Plan for Alfa Romeo in six years. Trust me, anyone with an abiding interest in it – dealers, suppliers, etc. – stopped looking at their watches long ago. It’s just not worth the exasperation or the effort expended.

But remarkably enough, even the aforementioned accomplished professional factions in the over-promise and under-deliver department can’t hold a candle to GM and its relentless tone deafness when it comes to pushing the Cadillac brand in Europe.

I have been giving Cadillac a lot of praise of late because the True Believers who are hard at work making the brand’s products as good as they possibly can be deserve the accolades. The new Cadillac models are bordering on the outstanding and the future bodes well for GM’s luxury brand. The advertising is even showing signs of life, remarkably enough.

But despite all the good things going on right now for Cadillac, there’s a lingering boneheadedness hovering over the proceedings that threatens to derail that momentum, and that is GM management’s blind insistence that Cadillac actually has a shot in establishing some momentum in the European market. And the reality is that they don’t have a clue and they don’t have a shot. Not even close, in fact.

Is it because the products aren’t good enough? That may have been the issue in the past, but the new CTS and ATS are definitely more than competitive with the German makes, and with each successive new model Cadillac becomes even more relevant and more competitive.

So if it isn’t product relevance or competitiveness, what is the problem, exactly? When all is said and done, it’s a cultural thing. In Europe Cadillac is an all-American brand treading water in a sea of ultra-competitive cars from Audi, BMW and Mercedes-Benz. And these star luxury-performance makes are more than just homeland brands, they’re rolling points of pride and symbols of technological supremacy, which the German public holds dear, for the most part. (There’s no doubt that the anti-car movement is gaining steam in Europe, but for now, homeland pride in Germany’s star brands holds sway.)

I get the distinct impression that GM management’s relentless naivete is getting the best of them. They have somehow come to believe that by using a little homespun Jimmy Stewart colloquial speak, as in “Aw shucks, we make some damn fine cars, come take a look” that they will slowly but surely turn the tide in Europe for Cadillac.

And I can safely say that isn’t going to happen.

GM is nowhere with Cadillac in the European market. Armed with less than 50 dealers and an awareness that is just this side of being nonexistent, Cadillac is an American luxury brand that has no resonance for consumers over there whatsoever. And on the occasions that it does, it’s not as a Nurburgring-worthy luxury-performance challenger to their sacrosanct home country brands. No, it’s as a symbol of a powerful, wide-open America, with a level of Hollywood luxury and glamor thrown in as an elegant punctuation point.

And there’s nothing wrong with that. In fact European consumers are reiterating a point that I’ve been pounding home for a while now and that is that Cadillac must learn how to be comfortable being Cadillac, and that outdoing the German manufacturers at their own game is not necessarily a winning strategy. European consumers expect a Cadillac to be different, and they’re okay with it.

Ironically enough, in its most recent TV spot for the new ELR, Cadillac marketers have alighted on the perfect positioning for the brand. It’s just too bad that they don’t even seem to understand it themselves. (Some people, as you might expect, took umbrage with the spot for portraying a confident America as opposed to the touchy-feely, politically correct, apologetic America that this country too often resembles. Cadillac marketers should stick to their guns, it’s okay that the brand isn’t for everyone. Being a “me-too” player in the luxury space isn’t a sustainable strategy for the brand.)

Watching GM executives flail about in Geneva trying to convince everyone that this is the year that Cadillac will finally gain a foothold in the European market has become an almost painful annual rite. And it’s a fool’s errand too.

Cadillac has had considerable success in China because that market is a sponge for anything new and different. But GM should wise-up about its strategy for the Cadillac brand in Europe, because whatever they think is eventually bound to happen for the brand, simply isn’t.

And that’s the High-Octane Truth for this week.