Will Caddy’s BLS Crack the Euro Code?

April 9, 2006






Take a ride in the new Euro-only Caddy BLS


2006 Cadillac STS-V by TCC Team (4/9/2006)
Driven to thrill.



Europe’s luxury car market has long been a closed club — as Cadillac has repeatedly learned during a series of failed efforts to crack the continental code. Now General Motors’ flagship brand is back. And while it still hopes to find a European niche for American imports, Caddy’s latest push will depend primarily on a model not even being sold in the States.


The new BLS is being billed as “more than a car, it’s a Cadillac.” Well perhaps. While the sedan does carry Caddy’s familiar wreath-and-crest badge, and though it does have the edgy lines of the division’s Art-and-Science design theme, the front-drive BLS is, under the skin, a Saab 9-3, built at the Swedish maker’s assembly line in Trollhattan.


Whether the BLS will be treated as an intriguing new option or dismissed as little more than a poseur remains to be seen, but there’s little doubt that Caddy’s dreams of global growth will rise or fall on the little sedan’s success.


“It’s going to instrumental, around the world, exposing new customers to the new face of Cadillac,” says GM’s global car czar, Bob Lutz.


The challenge, Lutz feels, is “educating” potential European customers about the dramatic changes in design, performance, and technology that have reshaped the Cadillac division in recent years. Analyst David Healy, of Burnham Securities, agrees. The image of the American brand, he suggests, is that of gun-toting gangsters, driving massive, finned machines, “much too big for American roads.”


The fins are gone, and the BLS is nearly small enough to fit inside the cargo compartment of Caddy’s biggest model, the Escalade ESV. The Saab-derived sedan does echo the edgy styling of the reborn American lineup, asserted Cadillac product director John Howell. But it’s the first-ever Cadillac equipped with a turbodiesel — among its four different powertrain options. That’s a must in the European market, where diesels now account for about half of all motor vehicle sales, and close to 60 percent in the luxury segment.


So, adds analyst Healy, “this has a better chance than most of the other” attempts Cadillac has made to break out of North America.


It’s not that the U.S. luxury maker has failed entirely trying to become a global brand. Caddy does have a few strong pockets, such as the Middle East , where volumes rose 50 percent over the last two years, and the marque’s products are now being offered in 48 countries, notes the division’s general manager, Jim Taylor.


In Europe, second only to the U.S. in the size of its overall luxury market, Cadillac sales soared 350 percent between 2001 and 2005, rising 42 percent last year along. Of course, continental sales still totaled only a meager 2100 last year, out of the 253,322 cars, trucks, and crossovers the brand sold worldwide.


Yet Taylor is confident the time is right to strike, noting the nearly 30-percent jump in U.S. volumes since 2001. “We really had to regenerate our home market and achieve success there before going after a global expansion,” he said during a recent drive along the French Riviera in the new BLS. With a product tailored for European needs, he argued, Cadillac is better positioned than simply relying on American imports.


The initial European reaction to the BLS has been cautiously positive.


TheCarConnection’s British-based reviewer, Richard Yarrow said, “the BLS actually feels better built than its more expensive siblings,” concluding that while the new Caddy won’t knock the Germans off the top of the sales charts, “For customers looking for something a bit different it’s worth considering.”


In the London Sunday Times, Andrew Frankel lamented a lack of cutting-edge technology, but praised GM’s conscious pricing strategy, which positions the sedan about $3000 below a comparable BMW 3-Series. The BLS “is fresh and interesting and I can forgive it a lot for that.”


The Saab-based sedan is only part of Caddy’s growth strategy. In Europe , the automaker has signed on the Dutch-based Kroymans, a retailing powerhouse, to help it expand its presence beyond a small number of boutique dealers.


In the long run, many industry analysts believe Caddy can no longer continue tinkering with global expansion. In an industry where even high-line makers, such as Lexus and Mercedes-Benz, must constantly consider economies of scale, Cadillac is at a serious disadvantage focusing only the United States . It needs the added volume, never mind the prestige, that comes with being a global player, to create a viable business case. The longer that takes, the harder it will be for Caddy to remain competitive.

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