The Auto Writer

The European only Cadillac BLS is an entry level luxury car for America's top selling luxury brand. The BLS along with the CTS are among the many models Cadillac sells in 25 continental markets. However, the recent collapse of a Dutch distributor has GM scrambling to find a new home for the brand.

This one has got to hurt.

General Motors, struggling to survive, has lost a significant chunk of its European market for its Cadillac luxury brand. Though not a big seller across much of Europe, GM has been seeing the brand gain a toehold in several markets including Russia, the UK and Switzerland.

European Supplier Takes A Beating

Yesterday, Automotive News reported that Cadillac’s chief supplier — Kroymans Corp. — has received court approval to suspend debt payments for four of its business units including Kroymans Import Europe, a distributor of Cadillac, Corvette and Hummer vehicles across much of Europe.

Kroymans, which is based in the Netherlands, says that it has an acute liquidity shortage due to a collapse in new- and used-car sales.

Small, But Growing Sales

Cadillac sales across the continent were under five thousand units for all of 2008, falling short of the 7500 vehicles GM had hoped to sell for 2008 before the market collapsed. Along with its homegrown brands, Opel and Vauxhall (UK), GM markets Corvette, Chevrolet and Hummer in Europe. Having a presence in Europe strengthens Cadillac’s global appeal especially for the compact BLS and the popular CTS line.

In some markets, including the UK, Cadillac sales will continue because GM distributes these cars directly along with Hummer and Corvette. The automaker is working on a new arrangement with Kroymans whereby GM Europe will sell Cadillac through its existing dealer network.

The setback for Cadillac comes as GM awaits to hear from the U.S. federal government whether they’ll continue to receive financial assistance to stay in business. Just this week GM announced that it was canceling an important diesel engine for its European market, a 2.9L powerplant for select Cadillac models.

Related reading: Can We Hope For The Cadillac BLS?