Reuss: Cadillac Flagship Possible, But GM Has “To Make Very Careful Decisions”
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Any way you look at it, the currently-launching Cadillac XTS is not The Wreath and Crest brand’s flagship vehicle. Cadillac even says so. For starters, utilizing a front-wheel drive platform and a single V6 engine offering automatically disqualifies it from competing with the likes of market stalwarts — the Mercedes-Benz S Class and BMW 7 Series, among a few others. And the fact that the XTS is priced much lower than the German flagships eliminates the exclusivity piece of the flagship puzzle, not helping its case one bit. Even so, the XTS was never meant to be a flagship, but — in our hotly-contested opinion — just a stop-gap.
To that end, GM North America President Mark Reuss recently told Automotive news reminded us all that a new Cadillac flagship is a strong possibility as General Motors solidifies the brand’s global strategy.
“I’m a fan of going right at those segments and beating them in segment,” Reuss says. In fact, he would “love Cadillac to have a flagship”.
A rear-wheel drive-based full-size sedan would maintain GM’s strategy of positioning Cadillac as a performance-oriented luxury brand and would follow in the path set out by the ATS, which directly takes on the BMW 3 Series this summer, as well as the CTS, which will debut an all-new model for the 2014 model year, rivaling the BMW 5 Series.
Ultimately, the only way in which a Caddy flagship could become reality is if General Motors executives decide that it’s the best way to use the automaker’s resources, which CEO Dan Akerson recently pegged at a healthy $8 billion annually.
“The way we’re funding Cadillac has been from, sort of, everything else in GM,” Reuss said. In effect, this results in “very reduced scale in terms of individual architectures, engines, technology” for Cadillac. “We have to make very careful decisions,” he concludes.
The GM executive team has already made many of these decisions, including the resolve to develop a new body-on-frame Escalade SUV, bring the ELR extended-range plug-in electric vehicle to market next year, and grow the all-new CTS to the size of the new 5 Series. But if anything is clear at this point, it’s that The General hasn’t yet made up its mind keeping very quiet about bringing a Cadillac flagship to market, even though GM has acquired several trademarks this month that would make fine names for such a vehicle, along with evidence suggesting development is underway.
Is GM hedging its bets? It sure seems that way.
The GM Authority Take
Cadillac needs a rear-wheel drive sport-luxury flagship. A better 7 Series, if you will… but with the soul of the new Cadillac.
PS: while you’re here, might as well check out our future Cadillac product guide.
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They need to make this flagship happen for a variety of reasons but the two main reasons is that cadillac will not be taken seriously as the standard of the world without such a vehicle. Another reason why an expensive top flight flagship is so important is because it serves as a hub for r & d and has a trickle down effect to less expensive models as it gets those technologies under scale. While they are at it they should come out w a flagship buick an really spread out the costs of the omega platform
maybe a Lambda?
Lol. Lambda vs. S Class/7 Series.
there should be no Lambda for Cadillac, 7 seater for Caddy when there is a Escalade? whats the point? Lambda was designed to replace GM mini vans, and i dont think it belongs as Cadillac.
Maybe against GL class?
I want a flagship for many reasons (It’d be sexy for the most part) but one of them is that I hate the idea of Lincoln MKT and foreign brand limos in the future. The death of the Panther did so much to cars in our daily life.
The flagship will likely not be commonly used in taxi applications. That’s what the XTS livery is for:
http://gmauthority.com/blog/2012/04/cadillac-xts-w20-livery-sedan-rpo-central/
So when the flagship comes, the XTS still stays? That would remind me of Lexus’ lineup with that one FWD car, the ES, to cater to the elderly.
I’d imagine that they would keep it around as long as the demand is maintained at a certain level. However, I’d strongly recommend GM move those customers — and the XTS — to Buick.
Buick is where soft luxury belongs!
Absolutely!
I don’t see any disadvantages with making the flagship a limo. It’s not like limo drivers need FWD, they’re good drivers. Plus, it will make a flagship buyer feel like he’s driving a limo!
But then Buick haven’t decide if they want to compete with the LS have they?
Buick doesn’t need a full-size car because GM would have built the LTS (possibily).
The LaCrosse, as slow selling as it is, is as big as a Buick should be.
The LaCrosse is selling slowly? News to me. Last time I checked, it was outselling the ES.
Buick needs a large flagship. The LaCrosse is a good luxury car, but not anywhere close to what a Buick flagship should be or represent. Buick needs to go bigger and take the LS head-on.
Could have sworn that the LaCross wasn’t shifting enough units to keep GM happy.
Or maybe it was the Regal.
Overall, GM is very happy with how all Buick models are selling. I think you’re referring to a few comments on here that questioned the longevity of the Regal as it was only selling less than 3,000 units a month..
In my defence, they do look the same.
The LS, contrary to popular belief(I don’t mean you, but rather the general public), is RWD, and when it was built, designed to be the direct competitor of the E Class, so I dont think Buick should target it, though it should target what the LS stands for, a large, pure luxury, comfortable flagship.
On the LS, when it came out in 1990, which I think was Toyota best time, it was far superior to the S class and 7er, however, the 1995 redesign was too little compared to the colossal, ground up, redesign the 1996 E Class went through, Mercedes has since regained its position as top dog in luxury, so Lexus, and its real models, the LS and SC reached their prime just a few years after they were released because of lackluster updates and redesign and now the SC is forgotten and the LS an archaic dinosoar. Oh Im ranting, better stop.
Anyway, so I dont think Buick needs to target the LS but having a Buick flagship is a great idea.
Correction, I was talking about E class and 5er not S class and 7er
Yes, that’s exactly what I’m thinking, Babersher. A full size Buick spent need to be RWD or take the LS on feature for feature. Ultimately, people don’t buy the LS because it’s RWD or because it has certain mechanical characteristics. They buy it for its docile, quiet nature, refinement, and – nowadays – status. In other words, the LS sells for its qualities, not features.
But are you sure the LS was originally designed to take on the E? As far as I know, that was the sole reason for Lexus-ifying the S141/GS while aiming the LS squarely at the S.
No Alex, Im not sure and I may be wrong, but I have a 1990 LS400 which is an awesome car and after comparing it to the E class and S class, I found it far closer to the E class in terms of size, power, and features.
Make buick the japanese fighter w plush rides. However i would move the next gen regal to alpha platform its lighter and technologicaly superior to epsilon when it comes to performance. Cadillac should focus on the germans and performance luxury and gm should make buick a proper lexus fighter and that will in turn make buicks profit margins fatter. The omega could serve as a lexus ls fighter in the buick application and a 7 series fighter in the caddy variant
I don’t think Buick should be targeting Lexus anymore. Lexus is moving into Cadillac territory in terms of style, drivetrain, and price. This isn’t what GM is used to, but Buick should lead its own pack. Them and the brands that they should be competing with, Acura, Lincoln, and Chrysler, are all struggling. Buick seems to be the first out of the pack, so just make cars that appeal to the market, and for other companies to follow.
Are they looser or what? Why GM don`t get it that they can earn some profit on the flagship? Why Audi, BMW and some others can lead the market and GM cannot? The Cadillac flagship story is just like it would have been written during the old GM. It all complies with Akerson`s vision – make Wall Street happy – in short term, and not to think by the best products categories. Increase profit margins by cheapening products … I`m just fed up with such ideas from GM.
Who said anything about cheapening products? Akerson and others within GM have never mentioned this as a viable strategy of achieving higher profitability. Instead, they will do so by:
1. Reducing complexity (platform count)
2. Fixing their European operations
3. Building scale (partnership with PSA)
4. Reducing churn
5. Spending equally through the peaks and troughs of the industry and economy to achieve #4
Cheapening products is not on that list. The company is set out to make the best vehicles on the market and is launching an outright onslaught of new vehicles in 2013 and 2014. This will be followed by a new generation of vehicles that achieve #1 (reducing platform count).
Now, the decision to build a flagship is not as simple as one may. Cadillac is mostly driven by U.S. sales. Its success is limited in Europe, China, and elsewhere internationally. Therefore, the market for such a vehicle (any Cadillac vehicle, in fact) is small, whereas for BMW and Benz, the world is their oyster. Perhaps once GM builds Cadillac to the scale of those two, then it will be able to rationalize such a vehicle. Until then, the return will be limited. The automaker is already taking steps to grow Cadillac outside of the U.S., so they are well on their way.
Well Alex google some news about changes they`ve done to the 2013 Cruze ( I mean suspension setup which is supposed to be simpler – cheaper, just like in old days). Eliminating platforms is good ( just take a look at VW`s MBQ platform ). But you know what ? Audi as a brand was in situation like Cadillac some 20 years ago. They weren`t perceived as a premium brand. And guess what ? They` ve succeded. And Cadillac could be in much better situation if they didn`t stop its reinvention. They`ve managed to create one of the best Cadillac ever made – the 2008 CTS, and then they left the brand with literally one car lineup. There were no STS replacement as a big V8 sedan even though Germans, Jaguar, Lexus didn`t abandon this segment. They could have done something great with superior new STS with capable V8. Yeah they screwed up! And it may be hard to believe I`m a GM fan.
The changes to the 2013 Cruze haven’t been announced officially yet… so I don’t think it’s wise to base the conversation on questionable facts. For all we know, the new suspension setup – if it does, in fact exist — could make the Cruze a better-driving car. And if it doesn’t, I doubt average buyers will care, let alone enthusiasts like you and me. I, for one, didn’t notice the difference between a z-link equipped Cruze and an Eco model when I drove both back-to-back.
In any event, this possible reduction of suspension complexity in the Cruze may not matter to anyone, yet result in more variants, for instance. But let’s reserve judgement until we actually get an official announcement and see/drive it.
As for Cadillac, the new CTS will be the spiritual successor to the STS, since it will be mostly the same size. But even the first-gen STS is too small and not luxurious enough to be considered a flagship. Your concern that Caddy will suddenly lose investment dollars doesn’t make sense to me. Remember this?
http://gmauthority.com/blog/2012/05/future-cadillac-cars-suv-roadster-escalade/
All those new Alpha-based models doesn’t seem like Caddy is going to end its resurrection after the new CTS and Escalade. The GM product offensive I’ve referred to as per Akerson starts in 2013… but it doesn’t actually gain full steam until 2015ish or so.
Until recently, Audi was a joke in the luxury space. They needed to reinvent the FWD layout to not be. So the fact that they made 2 generations of the A8 that was nowhere as good as the offerings from BMW and MBZ doesn’t really matter. Ultimately, strategic moves need to be made when it comes to Cadillac; the writing is on the wall that the flagship will come; the question is when. If I were heading up the brand, I’d wait until it made sense globally.
Now I hope that Cadillac Will indeed bring this RWD Alpha base flagship to market, because it will indeed position the brand right there with the Germans. You know Alex, Cadillac is the only recognizable luxury nameplate that is currently made in America today, and that is a damn shame. Look the Germans have 3 or 4 (Audi, BMW, Merc….etc), Japan has Lexus & Infinity, While even Korea Hyundai has the Equus & Genesis.
Therefore Alex, a Cadillac flagship will actually be America’s flagship. So GM you now know that you must proudly uphold the American flag. Disappointedly neither Ford nor Chrysler-Fiat does not have such vehicles, more so Ford with their disappointed Lincoln brand with only FWDs, What a shame on Ford. At least Chrysler has some good RWD base cars and SUVs. In contrast Ford turns the Explore SUV to FWD.
I am happy GM kept the prestigious Escalade on a RWD platform rather than killing the nameplate with FWD. So GM let a good strategy prevail, give us that flagship RWD Caddy.
@Valiance Holder You know, I almost want to agree with you. Almost. I love the patriotic talk and call to arms. But patriotism and business decisions/practices have very little in common. Never mind the fact that GM is in fact a global company — and that it will only get more global from here.
But here’s the crux of the situation: very few Americans, unfortunately, will see what you’re referring to for what it is and will continue purchasing the S Class or 7 Series over the proposed Cadillac competitor. In other words, for GM to go out of its way and take a huge risk by introducing a flagship to a limited Cadillac audience does not make business sense. Perhaps once the brand has a much larger scale globally will it be more practical to do so. Until then, we’re talking a huge expense for a limited return (read: a loss).
Alex, but if they followed new products assault started in 2011 with the first gen CTS their situation would have been different now. And, well it` s sad to think that way for a GM fan, but I`think that Caddy would flourish under VW`s command. BTW thanks for argument -dense discussion.
@Lucase Bankruptcy man. Bankruptcy. That’s what stalled product development and the entire development of all brands, including Caddy. In fact, the reorg solidified Cadillac into what it is today — a performance luxury brand. Before that, they didn’t know a performance luxury car from a soft luxury car.
Now, if VW were to go through such a reorganization, who knows how it would fare? And it still remains to be seen if Audi’s strategy of making FWD-based luxury cars will be applicable in the long run. They’re seeing some success right now, but it will be interesting to see if that continues well into the future. BMW and Mercedes have already established and proven themselves over decades. Cadillac and Audi — not so much.
They need to build a 2nd gen XLR based on the C7 in that under utilized plant in Bowling Green ky. If you need a flagship just call it FSR. Flagship Sport Roadster.
As impressive as the XLR was initally, a mk2 XLR isn’t something that should be of concern for Cadillac; at least not yet.
The XLR was an excellent idea that was poorly executed. A modified Y-body that dates back to 1984 with all the hardpoints still there, but dressed in the A&S suit that looked fantastic. Since it was already overlapping with the Corvette, of which the XLR cost more and performed poorly than the Vette, it was pretty much dead on arivial. Apart from the roof, interior, and dedicated Northstar powertrain, what did it have over the Corvette?
I have no objections to a 2nd gen XLR (don’t like the name FSR), but it would need to be further if not wholy removed from the Corvette. It means a bespoke platform, and it means a 6 digit price and GM takes a loss on each unit.
I bet it would look mind-blowing beautiful as the orginal did, but it needs to perform as such to make a mark on the world.
That is, unless, GM drops the “nothing faster than the Corvette” rule.