General Motors has again postponed the launch of its luxury brand Cadillac in Austral

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General Motors has again postponed the launch of its luxury brand Cadillac in Australia - this time indefinitely. By RICHARD BLACKBURN.


Plans to launch the iconic American luxury car brand Cadillac in Australia have been postponed indefinitely.

The famous nameplate was due to make a return to Australia next month after an absence of more than 70 years, but the growing economic gloom and currency fluctuations have forced parent company General Motors to postpone the launch. The move mirrors that made by local car importer Ateco, which has postponed plans to bring in a Chinese brand, Great Wall Motor, to Australia.

"t's a tough announcement for me and Holden with the decision in the last week to indefinitely delay Cadillac's introduction to Australia," said Holden boss Mark Reuss.

"We have one chance to launch the brand in Australia and in these challenging times we just believe that we couldn’t give it the best chance that it deserves as our flagship brand,” he said.

"This is painful and it is one of those tough decisions that you've got to make but we have to focus ourselves on re-inventing Holden and the small car that we're going to localise.

"We want to be able to do Cadillac right and there's time in the future to do that. Right now there's probably a bigger risk than reward in doing it."

Luxury car sales dropped off dramatically mid-way through last year as the sharemarket headed south.

The shock decision comes just a week before Australian media were scheduled to drive the car for the first time on local soil. Holden has already imported 89 CTS models.

It is a body blow for the 16 dealers who signed up for a Cadillac franchise last year in anticipation of an October 2008 launch. Holden is set to compensate dealers who have invested in Cadillac, although the company said most hadn't yet made major investments.

"There's a couple of dealers that have spent money that we're in very close communication with," said Reuss. "We'll work through the issues with the two dealers who have spent money. They're happy that we're not years down the track with this."

Reuss said the decision would not affect any jobs, and that the company was "more than happy to be looking at [Cadillac's reintroduction to the Australian market] on a month to month basis".

"We want to preserve the right to bring Cadillac back in here because we think there's a great market for it here, we've had a great reaction and we want to protect the future for Cadillac here," he said.

This is the second time the brand’s launch has been postponed. It was initially scheduled to go on sale in the last quarter of 2008. Holden says right-hand-drive production of the Cadillac CTS will continue.

The decision throws into grave doubt the local future of Holden’s GM Premium Brands portfolio, which comprises Saab, Hummer and Cadillac.

GM has announced that Saab is under “strategic review” and is looking for a possible buyer for the troubled Swedish brand, while Hummer is already up for sale. Locally, there were just over 1000 Hummers sold last year, while Saab sales dipped almost 40 per cent to 1158. Reuss said the cloud over the future of the two brands had affected the ompany's decision to postpone Cadillac.

GM planned to start the Cadillac brand with just one vehicle, the CTS sedan, a mid-sized rival for the likes of Audi’s A4, BMW’s 3-Series and Mercedes-Benz’s C-Class.

The CTS uses a more powerful version of the Holden Commodore’s 3.6-litre V6 engine. It was expected to be followed late this year by a sporty coupe version and possibly a wagon and compact 4WD.

GM held a glitzy launch of the Cadillac brand at the Sydney motor show in October last year, and the company’s local director of premium brands, Parveen Batish, told journalists the recent drop in value of the Australian dollar against the US currency had not affected the company’s launch plans.

"We negotiate our price with the factory in Australian dollars so there is no effect," he said at the time.

But Reuss admitted that the slide in the value of the dollar against the US currency had played a part in the decision.

"Since [the Sydney motor show] the market for new cars has continued to deteriorate, the challenging broader economic environment remains largely unchanged and the exchange rate has worsened for imports."

Cadillac was expected to continue a recent invasion of American cars, following the launch of Chrysler’s Dodge brand in 2006.

Overseas, the CTS has sparked a revival for Cadillac since its launch in September 2007, with sales up 60 per cent. Holden says the CTS will continue to be produced in right-hand drive.