GM to pull Cadillac from some European markets

By John Revill, Automotive News

General Motors will halt Cadillac sales in more than half of the brand's European markets following the collapse of its regional distributor.

The US carmaker will focus on markets such as Russia, the United Kingdom and Switzerland where the luxury brand has been able to compete against Germany's BMW, Mercedes-Benz and Audi premium brands.

"We will take it down to less than a dozen markets,” a GM Europe source told Automotive News Europe. The source did not want to be named because he is not authorised to speak on the matter.

Currently, GM sells Cadillacs in 25 European markets.

On March 20, Kroymans Corp., GM's European distributor for Cadillac cars, won court approval to suspend debt payments for four of its business units including Kroymans Import Europe, which distributes the Cadillac, Corvette and Hummer brands in Europe.

The Dutch-based dealer group said it has an acute liquidity shortage due to a collapse in new- and used-car sales.

A Kroymans spokesman said court-appointed administrators will take possession of the 3 500 unsold Cadillacs, Corvettes and Hummers at 165 dealerships on Monday.

A GM Europe spokesman said the carmaker is working with Kroymans on a new strategy for distributing the brands.

Part of the plan includes transferring Cadillac sales to GM Europe's dealerships.

GM aimed to sell 7 500 Cadillacs in Europe by 2008 when it appointed Kroymans as the brand's distributor in 2003.

Although Cadillac is one of America's top-selling luxury brands, many Europeans are put off by the brand's brash styling. Cadillac also was late in introducing diesel models in Europe where more than half of new cars sold are diesels.

Last year Cadillac's European sales fell 5 percent to 4 556. Hummer sales were down 1.8 percent to 2 327 and Corvette sales were 15.3 percent lower than 2007 at 1 086.

In the UK and Russia, GM already distributes directly Cadillac, Corvette and Hummer vehicles.

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Staff report from Automotive News (a Crain publication)