Cadillac to pull out of half of European markets, cancels diesel

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European sales projections for the brand are likely to turn pessimistic quickly

European sales projections for the brand are likely to turn pessimistic quickly

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Say what you will about General Motors' past decade or two of planning, their products have come a long, long way in the past several years. That makes the events of the past several months all the more unfortunate - just when things looked ready to turn around, the market collapses. Now the company is taking another blow, being forced to pull Cadillac from half of its European markets due to the collapse of its regional distributor, the Kroymans Group.

Earlier today it emerged that Cadillac has indefinitely delayed its diesel V6 planned for Europe, almost automatically cutting its target market in half. The further reduction in market reach thanks to a loss of its sales outlets could spell disaster for the brand. Court-appointed administrators will take charge of the group's 165 dealerships and 3,500 unsold cars following a court filing for debt protection that was granted March 20. "We will take it down to less than a dozen markets,” a source within GM told Automotive News Europe. The UK, Russia and Switzerland will be among the remaining locations where Cadillacs will be available.

The decision to kill the diesel V6 now seems small by comparison, though its effect on the brand could be almost as great in the long run. Already completely designed and developed, the diesel V6 engine had been in the works since at least 2007. It was to be built by diesel-engine specialist VM Motori out of Italy, a company which GM owns half of, reports Auto Observer. But the fantastically torquey (406lb-ft or about 550Nm) engine won't be coming now that the car crunch has plundered GM's available cash and is "indefinitely delayed" according to spokeswoman Joann Krell.

The decision to can the new engine, which would have gone into the CTS and STS sedans, might save money in the short term, but it will ultimately cost Cadillac sales and market share in Europe. While European buyers are about split evenly between diesel and petrol cars across the whole market, diesel still reigns supreme in the premium segment where Cadillac is trying to compete.

The demise of the V6 diesel also likely spells doom for the V8 turbodiesel also tagged for the CTS, as if more confirmation were needed after the Duramax diesel itself was put on hold as part of the company's financial realignment.

As fuel consumption and emissions standards continue to grow more stringent - and diesels continue to be strongly favored in taxation and fees, - the absence of a diesel in the brand's best models will be felt even more keenly. And that's not to mention the hopes of U.S. diesel fans that just went up in a sooty puff of smoke.

Cadillac isn't alone in rethinking expensive diesel programs, however. Nissan recently revealed it was reviewing its diesel plans for the U.S., though Mazda has decided to use clean diesel tech to do battle with hybrids, taking more of a European eye to the task.
 
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