Cadillac uses seminars to attract rich Chinese

Events help educate consumers in second tier cities

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SHANGHAI--To acquaint its luxury Cadillac brand with upscale Chinese, particularly in tier two and tier three cities, General Motors Corp. has turned away from traditional media as too expensive for its small, ultra-rich target market.

Instead, GM is luring 100-200 prospective customers and existing Cadillac owners to local dealers by hosting lifestyle events co-sponsored with other marketers, such as tastings with the Scotch whisky brand Macallan and fashion shows with Ermenegildo Zegna, an upscale Italian men's fashion house.

"We can't tell people enough about our brand and its history with just advertising," said Stuart Pierce, Shanghai GM's Cadillac brand director.

Amidst the wining and dining in showrooms outfitted with leather couches and small bars, Cadillac and Zegna execs soft sell their brands by chatting with customers and giving out "awards" (branded merchandise like T-shirts, picture frames, key rings and Cadillac car models) to guests who display "brand spirit."

The best response comes in second-tier cities, "where customers may not know as much about luxury brands, but VIPs there do want to learn about things like whisky and fashion. Plus, they enjoy experiencing the luxury lifestyle. If we can offer that, people are willing to spend two hours in a Cadillac show room," said Mr. Pierce.

While the grassroots events are not designed to be a formal sales pitch, he estimates GM sold "about 20" Cadillacs in recent months directly from the first few events, which cost less than $10,000 to organize. The expenses are shared by GM, the local dealers and the event's co-sponsor. GM also gained new sales by sending a 1959 Eldorado convertible to eight dealers around China on a Heritage Tour.

"The tie-ins today have also been extremely successful for both Macallan and Zegna, so we're looking to renew such relationships this year as well as forming other partnerships," he added, particularly with marketers of jewelry, watches and personal accessories.

The events, organized with GM's creative agency for Cadillac, Publicis Groupe's Leo Burnett office in Shanghai, are GM's latest effort to improve Cadillac's image in China. GM is now the top foreign car producer in China, according to the National Passenger Car Market Information Association, and the popularity of its Buick and Chevrolet models helped grow GM's total vehicle sales by 35.2% last year compared to 2004.

But Cadillac has turned out to be a tough sell since it launched in China in October 2004. In the first six months of last year, GM sold just over 1,200 units, very disappointing results in the world's fastest-growing car market.

Cadillac's heritage is less familiar than that of brands like Mercedes but more importantly, rich Chinese prefer big, richly-appointed four-door models that allow for chauffeurs. The locally-made Cadillac coupes produced by the Shanghai GM joint venture are too small. Getting a larger Cadillac model in the market will take at least another year, so in the meantime, GM is focused on raising the profile of Cadillac and establishing a national dealer network.

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