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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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Comments (6)
  1. Bad idea, even with the market the way it is
     
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  2. I would suspect this is all part of a bigger picture that has not been announced yet. I wonder what it could be? Something is coming and it'll be big, don't forget March 31st is their deadline as noted on here.
     
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  3. Without a diesel there is not point in selling luxury sedans in Europe. It is as simple as that.
     
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  4. I think you can just dream of something bigger to happen... This program has just been cancelled because the development of such an engine is really expensive and...
    Just to share some thoughts, you first have to remember that this program was supposed to go in production as a MY2009 (meaning mid 2008), so the major part of the cost were already spent before the crisis.
    Then, what could also surprised you is that you haven't heard about this program for a long time; you can be sure that there was development issues. Issues that have delayed the program, independantly of GM shortage of cash.
    Moreover, VM Motori is quite a good company, but they were only supplier. That means that the engine characteristics were defined by GM or to be more precise Opel (The brand that is taking care of small displacement diesel engine). And to be honest, Opel is not a great diesel engine designer (all there good engines are coming from the joint venture between GM and Fiat). And if you take a look at the engine technical characteristics, you can doubt that with a single turbo and 2.9l, the 250hp and 550Nm and euro5 compliance could be reached. I mean with an engine that has enough torque at low speed, so it could compete with the 530d from BMW and the E320CDI from Mercedes.
    For me GM hasn't been able to develop the engine and has no other plan to put a diesel engine in a Cadillac CTS and whatever (because you can also understand that GM would have not earned enough money to cover this engine development cost, just with the sales of the Cadillac CTS - which has no real image in Europe).
     
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  5. That's all very well but where do I go to get my STS serviced now?
    I live in Spain ,I guess that means my 2 year old car is now worthless.
     
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  6. This engine is already in production!
    Planned originally to power the Cadillac CTS in Europe, the VM Motori 3-litre V6 RA 630 diesel has now been re-engineered and will appear in at least two new vehicles in Europe in 2011. At least one new vehicle will appear at next year’s Geneva Motor Show. US sources point to the 2011 Chrysler Jeep Grand Cherokee. Until September 2009, this design had a Mercedes-Benz 3-litre engine but this has since been ‘pulled’, highlighting Fiat’s Italian roots.
     
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