Cadillac launch canned

The brand is on hold "indefinitely".

The decision has now cast a shadow over two other marginal GM products, Saab and Hummer. However, GM-Holden remains committed to the slow-selling pair despite being put under a "strategic review" by the parent General Motors.

GM-Holden chairman and managing director, Mark Reuss, said the company remained committed to Saab and Hummer.

"We made commitments with our dealership body on that so we're prepared to honour those commitments," he said.

Cadillac was to be the third make, along with Saab and Hummer, in the GM Premium Brands porfolio. Reuss has blamed the global and local car industry downturn for the Cadillac decision.

"It's a tough call but we only really had one chance to launch the brand here in Australia," he said.

"But in these challenging times we figured we couldn't give it the chance it deserves as our flagship brand."'

Reuss said the decision was taken just weeks ago before the investment started to cost big dollars. He said the initial outlay in the luxury brand was "not significant".

GM insiders believe it to be in the "low millions" for local compliance.

"From a launch expense standpoint we haven't crossed over into the place where we started spending big yet," he said.

GM-Holden had already certifying 89 CTS sedans for sale but these cars will now be on-sold into other right-hand drive markets.

The CTS sedan was to spearhead the Cadillac brands return within weeks, with other models to join the lineup later.

Reuss said the company would turn its attention on building the small four cylinder car in Adelaide.

"We have to refocus ourselves on reinventing Holden and the small car," he said.

Reuss has not ruled out Cadillac being put back on the agenda when the economy picks up.

"We'll revisit it on a month-to-month basis," he said.

But in the short term, the luxury franchise is on hold.

"There's a tough road ahead from GM and the whole situation that we've gone through with the US governemnent is very tough," he said.

"So we have to make some tough calls and good calls on where we focus the resources we have.

"In Australia we are focusing everything we have on our core fundamental activities."

GM Holden had already appointed 14 dealers nationally and three in New Zealand to handle the franchise. Reuss said discussions were being held with two dealers over compensation for some of their investment.

"We're prepared to work through those issues with the dealers," he said.

General Motors had wanted to make the Cadillac brand the global flagship for the company.