Cadillac is far from catching up the likes of Audi and BMW in the Chinese market, but they might grow their current market share in the next few years if they play their cards right. According to a Reuters report filed yesterday, Cadillac just isn’t cool with Chinese consumers due to the use of sharp angular designs on show which goes against Chinese design styles. I’d personally disagree with the diagnosis and say the different styling works in China, the problem is the Cadillac package itself.
A few weeks ago, during an informal chat with a group of people who may or may not be related to Cadillac China, we came up with a list of reasons why Caddy just cant compete with the Germans when it comes to swaying Chinese consumers into the Caddy fold. Design was never an issue for these guys:
1) The current SLS is far too out of date – Cadillac may have changed the older six cylinder engine for a much update 2.0T Direct Injection with 270bhp, but Chinese consumers really cannot compare it to the new 5-Series or the A6 in terms of style or brand pedigree.
2) The CTS is too small and the engine is too big – The CTS is probably one of the best looking cars in the segment, but Chinese consumers prefer fuel sipping engines, thus the 3.0L, 3.5L and 6.2T V6 (Update: It’s a V8, my mistake) engines are a little on the rich side for even for cash rich Chinese. American cars are called ‘Oil Tigers‘ in China, a stereotype derived from bigger American cars that drink gasoline like old Chinese men drink tea and Baijiu, GM hasn’t moved to dispel this stereotype from the Cadillac range as of yet.
3) Long delivery times – Made in America means longer waiting times. Made in Shenyang and Changchun means short waiting times.
4) The SRX SUV is priced on par with the locally made Audi Q5 and above the BMW X1 at 420,000RMB but again, it comes with a higher displacement engine. Of course imported buys you a certain prestige, but cost savings are a Chinese consumers favorite game. The SRX owners forums over at autohome.com.cn are filled with postings about fuel consumption.
5) Parts and Servicing – Although China is becoming more known for its free spending consumers that do not bat an eyelid at luxury prices, parts make or break the deal. If your car is off the road for several days while a part is shipped in from the USA, you will probably opt for a locally made Audi, BMW or Merc with your next purchase.
Currently Cadillac produces just the SLS in China with Shanghai GM but sales are small. There are supposedly plans to produce the new XTS in China and plans to import the ATS but a reliance on larger displacement power plants and imports is likely to impair Caddy in the short term. Chinese media reports did once indicate that the SRX would be produced in China along with a 2.0T engine but nothing has made it to the production lines as of yet.
Chen Dong, the 42-year-old owner of a cellphone wholesale business in Beijing, is a big fan of Hollywood movies and the Chicago Bulls basketball team, and sends his daughter to college in the United States.
He thought of stretching that love of all things American to his car, but instead opted for a new black Audi A6 sedan over a rival Cadillac – underscoring the challenge facing General Motors Co as it seeks to promote Cadillac in China and transform it into a fully-fledged global luxury brand.
“The Cadillac SLS was one of our options, but we thought the look was just way too aggressive,” said Chen, who also called in at BMW, Volvo and Infiniti showrooms. “The Cadillac’s (exterior) lines were not smooth.”
GM’s Cadillac problem is that many other car buyers in China feel the same as Chen: that Cadillac’s edgy look, with its sharp, angular lines and creased edges – inspired by the design of American stealth military planes – is a turn-off, say analysts and, indeed, Cadillac marketers’ themselves.
The U.S. automaker now seems ready to phase out the angular look to woo more buyers in China, the world’s biggest market for cars and a beacon for global luxury brands – where a Mercedes S-Class 300 sedan can set you back $157,000.
GM Chief Executive Dan Akerson wants Cadillac sales in China to reach U.S. levels by 2015 or 2016, part of a broader push to globalize and revive the brand from decades of neglect and turn it into a serious rival to BMW.