"Russia is today the focal point in growth in Europe for Cadillac"

A seminal interview with
JIM VURPILLAT
Global Marketing Director for Cadillac
during the Cadillac Culinary Challenge
and Media Luncheon at the Town Center
in Boca Raton, Florida.

Posted on May 25/2010 • All pictures by Pepe Forte.

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We attended on Saturday May 22 the Cadillac Culinary Challenge and Media Luncheon at the Town Center in Boca Raton, Florida, about 50 miles North of Miami —an event similar to this one was held last year in the Sunshine Capital—, which purpose is to offer people —not only the automotive journalists— the opportunity to test Cadillac products and compare them with some other rival brands without going to visit multiple dealerships. During this session, we interviewed Jim Vurpillat, Global Marketing Director for Cadillac about different topics of the brand.

—Thanks for your time, Mr. Vurpillat. Why did Cadillac choose South Florida as the first plaza for this event?

—Southern Florida is very important. Specifically Miami is the 4th largest luxury market in the United States. That’s why we choose this lead market for the event... so this is the first place where we do this event of the 13 cities in the country.

—The star of this event is the Cadillac CTS Coupe…

—Yes, the CTS Coupe, which production starts in a month, being in the dealerships at the end of July or beginning of August. We are very excited because the car has been designed as a coupe from the start, it is not just a 2-door version of our CTS sedan... it is a different creature, it is 2 inches lower, 2 inches shorter, 2 inches wider in the rear, with a lower, quicker, slicker look as we say. It is pretty much aggressive which is perfect for what people want in luxury coupes. They want style, fun to drive, they want performance and with this vehicle we think we deliver it completely.

—Here, in front of God… doesn’t the CTS Coupe sit at all on the CTS sedan structure?

—No, for sure… nobody in the company shares this architecture… of course it shares, mechanically, drivetrain with the CTS sedan, but that's it, from the windshield back is a completely different car.

—Jumping out the CTS... what’s the next move for the company outside the United States?

—Actually for us we have a large concentration in China, a lot of growth in the Middle East and Russia and in “old” Western Europe, but now we can’t separate Russia from the traditional Europe. So today the focal point in growth in Europe is on Russia, the Russian market. Obviously, Germany still remains as our biggest market within of all Europe but Russia is growing very fast. That’s why we spend a lot of time and effort in growing our dealership there now and getting our products into the Russian market.

—Interesting. I remember when Nixon tried to make an approach to the Soviet Union and he took some Fords to exhibit in Moscow back in 1972. However, now with Cadillac this is the first time in the history of automobile that a truly American luxury brand steps on a former communist country, according to the propaganda based on farmers and workers. Do we have now enough customers for Cadillac in Russia?

— Yes, very much… This is our first input in history in Russia, the former Soviet Union… there’s a lot of explosion in luxury goods in Russia and we think that Cadillac fits in perfectly. A lot of customers in Russia can afford a Cadillac now. The Russian market is developing, the economy is developing, gas is a little less expensive in that market, you’ve got significant oil money and the reserves there are huge and it is a very fast wealthy class of people.

—Somehow, when it comes to luxury brands, we can say that Russians have been at least exposed to Mercedes-Benz through the years. Do you think that the absence of Cadillac would benefit —just by contrast— the brand out there or not?

—You know, there’s something about the authentic American brand, and we get a lot from our dealers and consumer who buy Cadillacs in Russia, that is very distinctive, it’s very different. It’s been very easy to buy a Mercedes or a BMW in Russia, but if they’d want to stand out and to be a little bit of different, Cadillac does it extremely well. They like the american-ism of it, if you will. From a market perspective, Cadillac is known as an American brand, but you really don’t want to wrap yourself in a flag, because then you become too nationalistic and it gets into politics, so you really have to be careful with that. Just by name everybody know that this is an American brand, but more important than that is the fact than when I compare market to market actually we find from a luxury point of view that luxury consumers around the world are more similar that dissimilar regardless cultural differences or country differences. If you think about it for a minute you realize that wealthy people tend to do the same things, they are educated, they like to go to nice restaurants, they vacation in nice places, they like to drive nice cars. So Cadillac perfectly fits the Russian market too. We’ve sold a lot of Escalades in Russia, and we are doing very well with the Escalade as a great image product.

—Since this is the first time in Russia's history that the country is participating in a real car market, how does Cadillac handle the detail sales... through small business, private salespersons, government dealerships..?

—General Motors has a whole operation in Russia that works on marketing and developing of all our products. We have dealerships there like you see them here in the United States or you see them in Mexico, Canada. It is a very traditional dealership network. We have 26 dealership throughout Russia and the buying experience is very similar, I mean, you walk into the dealership, you see the vehicle on display, the salesman takes you for a test drive… We don’t have to have any government involvement or a joint venture involvement. In China it is different, we have a joint venture in China because that is a government requirement to be in that market.

—How does Russia get the Cadillacs… are you manufacturing there?

—The way we ship into Russia… we build the cars here in our assembly plants in United States… the CTS is in Lansing, Michigan, so we ship the vehicles to a facility in Poland that disassemble the car, kits it…

—I'm sorry to interrupt... How advanced is the vehicle in construction when it hits Poland?

—Oh, it is complete, it is a 100 percent complete when we ship it into Poland… they disassemble it as I told you, so it gets the components, send that to Kaliningrad, which is a kind of duty free zone, part of the Russian state, and the car is reassembled and shipped once again to what they call Mother Russia, where is sold then.

—Isn’t it a little busy... complicated?

—That gives us advantages again because we are employing people in Russia and employing people in Poland and there’s a tax advantage of doing that. It’s better bringing the vehicle into Russia that way versus purely importing them from the United States.

—Besides the Escalade that you’ve already mentioned, which is the other key model from Cadillac to roll out in Europe?

—Really is the CTS, it is our focal point of our lines not only in the United States but in Europe too. If you really think about it, what Europeans prefer from a luxury standpoint is rear wheel drive, performance. We do sedan, coupe and wagon… the wagon plays a very big part of our plan in the European market because they are so important there, but then specifically in Russia you have to add the Escalade to the scheme.

—O.K., let’s go to China. Buick has been there since 1997, with the Century, rebadged as Shanghai, and still is a solid operation, I’ve seen them there. Isn’t it too risky to have two luxury brands competing inside the family in an emerging foreign market that has its own rules? You know the meaning of cannibalism…

—Actually we have a multi-brand structure in China, we sell Chevrolet products, then the Buick brand and Cadillac as a luxury brand…

—I know that Cadillac is the true luxury brand, but in the beginning the Century in China was entitled to be driven only by the government executives. That’s an expression of luxury…

—We’ve been extremely successful with the Buick brand and its position is a very solid premium brand that runs as a full portfolio from relatively inexpensive product up to a middle luxury layer if you will. But we take over the luxury side to compete directly against Audi, BMW, Mercedes… so they work very complementary with each other.

—India VS China:

Right now we are not in the Indian market, the Indian market hasn’t grown significantly from a luxury standpoint. General Motors is a corporation which is doing extremely well in India and growing very rapidly with the Chevrolet brand but not yet on the luxury side, but most of our strategy is to export from United States to a market that is large enough that we can establish production facilities in that market.

—Thanks, Jim, this conversation has been extremely interesting.

—You are welcome, Pepe.