How Cadillac Is Using Trump to Reinvent Itself in China

When Cadillac released its July 2017 regional sales data, two major markets were highlighted: the US and China. Accounting for 46 percent of its sales, the company sold 37.6 percent more cars in China compared with last year, continuing its spate of double digit growth. In contrast, Cadillac sales in the US shrank 21.7 percent year over year. Many attributed this variance in sales to the automaker's different positioning strategies in the China and US, a difference that involves the U.S. president. In an interview with Adage, Cadillac’s brand director Alex Liu gave insights into Cadillac’s experiments with localization in China. While in the U.S., Trump has the lowest approval rating of any president in their first year (it's currently at 34 percent), in China, Trump is more popular. "For the China market, the U.S. president is the biggest celebrity for the brand," Liu said noting that in China, Cadillac embraces the heritage of the American president, an image that is entirely absent in the U.S. market. When Donald Trump became president, Cadillac posted on its official Weibo account a picture of Trump in 1976, featuring the future president posing in front of his own Cadillac. Surprisingly, the majority of reactions from online users relates not to negative political sentiment but to his physical appearance and how different he looked as a young man than he does today. The brand also invested a lot in product placement (there were placements in about 10 Chinese TV series per year) as the company's main advertising distribution strategy. Cadillac appeared in the 2016 film blockbuster "The Mermaid." The car also recently appeared in a popular urban drama called "Mr. Love," in which the main character—the manager of a five-star hotel—drives a Cadillac CT6. Consumers in the United States increasingly favor luxury crossover vehicles and SUVs. The Cadillac, with its sedan-heavy product line, has found it a challenge to maintain its original sales performance. In China, however, buyers have reacted positively to the sedan as they've become more familiar with Cadillac's branding. Sales of the XTS sedan rose 45 percent in May from the same time a year ago. The stereotype of the Cadillac as "your grandfather's car" is almost non-existent in China. Cadillac's brand image emphasizes individual innovation and style, which is attractive to younger consumers. The average age of buyers in each country tells the story more succinctly: In China, the average age is 35, while in the US, it's 60. Until a few years ago, Cadillac had to pay China's 25 percent import tariff for its cars sold there. Now Cadillac has local production on the mainland, a move that has helped Cadillac attain competitive pricing, which has sped up the race against its biggest competitors, the three German car giants: BMW, Mercedes-Benz, and Audi. "In 2018, Cadillac will launch a small SUV," Andreas Schaaf, the vice president of Cadillac China announced in an interview with Chinese media, speaking about their commitment to this market. He also said that beginning in 2018, each year, for five years, Cadillac will launch a new model in China.

How Cadillac Is Using Trump to Reinvent Itself in China

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Published September 02, 2017

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How Cadillac Is Using Trump to Reinvent Itself in China