Cadillac's success key to General Motors' revival: media

• Source: Xinhua
• [19:21 July 10 2009]
• Comments

Cadillac is a valuable asset and should be part of the new General Motors (GM), the Detroit News said on Thursday.

Cadillac is GM's most famous brand and known worldwide. In its heyday, it rolled out some of the world's most beautiful cars, such as the fin-tailed sedans.

But in recent years, people have not bought cars in large numbers because of the high price of gasoline. Cadillac holds barely 1 percent of the US market, trailing BMW, Lexus, Mercedes-Benz and Honda's Acura.

GM, which has won approval for the sale of its assets to a new entity backed by the government, plans to exit bankruptcy this week.

The company had set out in recent years to restore the brand, designing attractive models such as the acclaimed CTS mid-size car, improving quality and refining the interiors.

GM is eliminating all but four brands: Cadillac, Buick, GMC and Chevrolet as part of its court-supervised restructuring.

The Detroit News said GM will be hard-pressed to mount a challenge to the leading luxury carmakers, but it will compete against the top names in the industry because it needs a luxury brand to showcase its best technololgy and design, and to retain customers as they progress from mainstream to to premium cars.

"You can't have a successful GM without a successful premium brand." the newspaper quoted Cadillac general mnager Steve Hill as saying.

Restoring Cadillac will require GM to weigh the brand's long-term needs against short-term financial pressures on the company. In addition to GM's constrained finances and the weak state of global car markets, Cadillac is battling the perception, according to brand expert Alexander Edwards.

GM's bankruptcy also provides a chance to put the Cadillac business on a solid footing, the report said. Under bankruptcy, Cadillac will be able to cut its dealers from 1,500 to 500, enabling the survivors to reduce discounts and become more profitable.

Cadillac is revamping its lineup, too. It is developing a large sedan, the XTS, to replace the STS and the aging DTS cars. It will build a small car to compete in the segment dominated by BMW's 3 Series, the Detroit News said.