Tuesday 4 March 2014

Europe: Chevy out but Caddy stays

General Motors does not seem to know what to do in Europe: it is kicking out the Chevrolet brand, but giving Cadillac some extra shine. Why not dump Cadillac too? And why go to the expense of developing a new diesel for the brand?

The decision to withdraw Chevrolet from Europe was made to "clear the runway for Opel and Vauxhall," claims Dan Ammann, president of General Motors and chairman of Opel's supervisory board.
"Those two brands are now on a positive trajectory and there is a focus for us to win in Europe with Opel and Vauxhall," said Ammann. "We have all the pieces in place to do this and we have increased our share of the European market for the first time in 14 years."

Another reason for pulling Chevrolet out of Europe was to clear up any doubts about GM's commitment to the two domestic brands.

"There's been a question mark over Europe for some time which we have now cleared up; we have the resource and commitment," he said.

“Work still needs to be done on the clarity of the brands,” he said.

“But new product, starting with Corsa at the end of this year and Astra next year, will help underscore the brand identity and redefine customers' perception of the brands,” he claimed, adding that "the value and history of Vauxhall is better understood within GM than you might think."

"Brands evolve over a period of time and GM is very strong financially so we can take a long-term view," said Ammann. Does that mean Ammann is waiting for the arrival of a diesel Caddy, something that was planned some time ago?

But why muddy the GM waters in Europe by keeping Caddy alive and giving it yet another relaunch in the region?

"It's long-term and low key," is Ammann’s view. "There is a role for Cadillac at the top of the Vauxhall and Opel line-ups."

Really? But what are the numbers and is it really worth the candle? Time will tell.

The reality is that Cadillac sold around 1,725 vehicles in Europe last year. BMW delivered 857,883 vehicles and Audi another 745,487, while Mercedes-Benz sold just over one million units. Big numbers.

The rumour mill has it that GM has launched a new engine programme in the US to replace the VM Motori unit it was developing for Cadillac. This is what Ammann may be waiting for. GM once owned a part share of VM Motori but ceded this to Fiat which now owns the Italian diesel engine maker in its entirety. VM Motori has had a chequered career in terms of its ownership.

Rumours suggest GM's new diesel is a similar engine to the VM Motori 3-litre V6 diesel made in Cento (in the Ram 1500, a Ward's top 10 Best Engine winner for 2014) and is destined for the Cadillac brand in Europe. Does that mean it will have a compacted graphite iron (CGI) cylinder block like that of the Italian V6? GM has yet to build a production vee diesel with a CGI block, although it did design a 4.5-litre vee diesel with a CGI block that had to be shelved, but which may now be in the process of being revived. GM's great US rival Ford Motor Company has both diesel and gasoline engines with CGI blocks and The General's top brass must rue the day they faltered in making a decision in this direction.

But why develop a ‘small’ and refined automotive diesel for a brand that sells so few cars in Europe. Surely GM must have another use or uses outside of Cadillac to justify new engine investment in manufacturing costs alone? One hundred million dollars goes nowhere these days when a new engine is on the stocks (GM puts the tab on its new diesel at $60 million). And numbers made per year have to be at least in the 100,000 range to make any sense at all. So what is happening here? What is the big picture? 

Dave Leone, chief engineer-GM performance cars, is reported as saying the diesel-backed powertrain is critical to Cadillac’s success in Europe.

But he added that the new engine will not come “as soon as I would like”. Reports suggest the new diesel will go into the CTS and ATS sports sedans, but the new diesel (CGI or not) will not be falling out of the skies anytime soon.

“We are working on diesels for both of those applications,” Leone is reported as telling WardsAuto at the Geneva show.

Meanwhile, some day, someone may to have to bite the bullet and have just one GM brand in Europe, or differentiate the Opel and Vauxhall brands more distinctly.

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