Is Cadillac’s revival failing? That’s the question The Motley Fool is asking, and they have the evidence to back up an answer.
But, first, how long is this “revival” going to be going? Because the first CTS in 2003 was considered the instigator of the revival. Don’t you think, now three generations in, it’s hardly a revival anymore? Anyway, the CTS needs no introduction, and neither does the ATS—both are very good cars at what they do and provide an excellent alternative to more popular vehicles from Europe (especially Germany) and Asia. Everything’s rosy, right?
But The Fool think there’s something going on. “When you look at the monthly sales charts, it’s clear to see where Cadillac’s troubles lie: Sales of the big XTS sedan are down 21 percent through May, and the much-acclaimed compact ATS is down 20 percent.” However, let’s be honest for a moment—what is an XTS? It’s merely a remnant of the old de Ville and functions as General Motors’ entry for a full-size American boat without succumbing to the “Old Cadillac.” If anything, it’s hardly a part of the “revival.”
Meanwhile, the CTS and SRX crossover are up (39 and 21 percent, respectively), but not enough to make up for the ATS’s deficit. The Escalade is brand-new, so we shouldn’t count that (although sales are up 30%), and the ELR is too nichey to bother.
Plus, The Fool reports that “Cadillac is backing off of fleet sales,” instead targeting more profitable retail sales. Through April, Cadillac’s fleet sales were down 40 percent, including down a whopping 95 percent for the ATS.
Cadillac spokesman David Caldwell told The Fool that some of the slippage with the XTS and ATS “is simply a matter of shifting customer preferences. Luxury sedans in general have been relatively weak next to SUVs and crossovers.” And considering the SRX is long in the tooth, it stands to reason.
So how to explain the ATS’s issues? The Fool consulted with Edmunds.com Senior Analyst, Jessica Caldwell (who’s not related to Cadillac’s David). She said that BMW’s 3-series is brand-new for 2014 and has the gee-whiz factor that the year-old ATS lacks; it’s also quite possible that the typical Bimmer buyer may not even give the ATS the time of day, although it works the other way around. Is image really the issue at play? She seems to think so.
Perhaps it will take another generation of buyers to consider the ATS as a viable competitor to BMW even if the performance number suggest they’re already equals. With the ATS coupe set to join Cadillac’s roster later in 2014, the lineup may be given a boost.
Comments
Oh I don’t know. Maybe because people don’t want to buy from a company that has recalled 26 Million vehicles in the past 5 years. Just a guess.
I think the main factor here is Cadillac’s image. While their new cars are great, past generations were er, shit. They do need time to take over BMW, Lexus, Mercedes Benz, and Infiniti in sales. Perhaps Cadillac should start up that $100 test drive thing again (without looking desperate).
There are also some problems within the lineup. Quite frankly, the XTS and ELR should not be here. They are not competitive and do nothing to boost reputation. Also, CUE needs to be fixed (does GM even test it?)! Cadillac needs a better engine lineup with more power and better efficiency than competitors. They should have new 1.6t, 1.8t, 2.5tdi, 2.8tdi, 2.8t, 3.0t, and 4.3t engines coming to their lineup in the future.
Cadillac should get these models soon:
ATS Convertible
ATS Wagon
ATS V-Sport
ATS V
SRX
LTS
Cadillac could get an X1 or GLK competitor based off of the Alpha platform too.
This.
The XTS is basically a Buick and the ELR should have been a Buick.
And an Alpha X1 competitor needs to happen, as well as moving the SRX to Alpha.
Though I don’t think Cadillac needs that many engines. I think they should have a small number of really good engines, rather than a bunch of okay engines.
Also, you forgot to add:
SRX V-Sport
SRX V
LTS Coupe
LTS V-Sport
LTS V
How about cost? ATS is good, but When you can get a 3 series BMW for the same price as an ATS why chose ATS. ELR, price is a joke. XTS a waste of time waiting for LTS. If Cadillac wants to really compete with EU and high end cars from Asia they need to compete on price as Hyundai and Kia do. The cars are great, we have an ATS and a 750 BMW, so I can judge, but in the overall market only someone, me, that wants an American brand will pay for a Cadillac.
“If Cadillac wants to really compete with EU and high end cars from Asia they need to compete on price as Hyundai and Kia do.”
Like Hyundai and Kia? By pricing the product low to shift more units every quarter while destroying product residuals and any sense of exclusivity because you’ve made a mass market product instead of limited production product?
Cadillac already used that business model from about the late 60’s to 2002, and it did nothing but harm to Cadillac’s once storied and proud name. Everything from 2002 to toady has been damage control for the decades and decades of substandard product that was anything but luxurious.
But the following quote hits at the heart of the matter, and why I said that the ATS has to EARN it’s reputation and build its image in the compact segment. You’re already aware of how good the ATS relative to the 3, but Cadillac’s image doesn’t have the same clout that you know a BMW would have.
“How about cost? ATS is good, but When you can get a 3 series BMW for the same price as an ATS why chose ATS”
The 328i starts at $32,750
The ATS starts at $33,065
Difference: $315 or 99.047331%
Putting the ATS’s price lower than what is would be disadvantage. It would cripple any clout and brand image that Cadillac would ever hope to have right out of the gate by presenting the ATS as a cheaper and less exclusive car. A hypothetical ATS priced $5,000 less than a 3 series doesn’t say that the ATS is a better buy. It actually says that there is $5,000 worth of content and engineering missing from an ATS and that GM is really hoping that the Cadillac badge on the front will get people into the showroom.
In luxury circles, it doesn’t work like how Hyundai and Kia do it. There are no price wars or races to undercut the other with discounts, rebates, or a free $100 gas card. It’s where supply is restrained just enough to keep a stable and sustained long-term demand. It worked for Mercedes. It worked for BMW. It worked for Lexus. Its going to work for Cadillac, but it will take many years of hard earned trust.
The C-class starts low at $29K and the Q50 starts high at $37K. If Cadillac intends to walk the walk with the ATS, it needs to talk the talk like its contemporaries are doing.
But, as I’ve said before, if you worry about price you’re not a luxury consumer.
“Perhaps it will take another generation of buyers to consider the ATS as a viable competitor to BMW even if the performance number suggest they’re already equals. ”
Pretty much what its going to take. The CTS didn’t get where it is overnight, and the ATS won’t either. It has to be exceptional for years for the nameplate to take root in a buyers mind, and even then it’ll be seen like the CTS is now; a solid alternative but not one of the top dogs of the segment.
Even before the ATS launches, nobody should have ever though that it would set the world on fire. This isn’t a sales race, it’s a fight to establish a presence in the buyers mind that the product is exceptional.
Get rid of Buick. Its taking precious sales away from Cadillac. Buick isn’t necessary anymore it just eats away at the xts sales. Same with the verano. It eats away at the ATS sales.
Do you have any marketing data to back up that claim? Buick is a brand of a very different nature from Cadillac. Even model by model. A Verano can’t compare to an ATS, inside, outside, or by driving nature.
While I agree that Buick is a junk brand that GM should get rid of, it isn’t taking sales away from Cadillac, its taking them away from Chevy.
Caddy has a brand and marketing problem. It, sadly, lacks the cool “it” factor.
I also think the styling packs a bit too much crome for today’s under-stated “boring” tastes.
Shoppers aren’t looking for quality. They are looking to buy whatever its currently “in”.
“Shoppers aren’t looking for quality.”
2 week ago you said that the democratization of luxury products was good thing, and that Hyundai would lead the charge. That statement alone should tell you that there is no such thing as democratization of luxury as a luxury buyer buys to have something that others do now, whereas you’re advocating for cheap short-term styling fads as Hyundai is championing at the moment.
They can style a Genesis however they see fit and make it look pretty, but it won’t erase memory of all the rusted late-2000’s Elantras and Accents I see daily; their paint blistering and mufflers cracked and loud. It doesn’t bode well for the Genesis for the consumer to know that such absence of QC at Hyundai 10 years ago can’t be swept under the rug with a value priced mid-size car that’s pretending to be a luxury car.
“IT-ness” fades like every other fad. Quality and workmanship is stained into your history, and you wear it for other to see. If you’re putting quality low on the list of things your next car should have, then you have a problem.
I think a lot of people are waiting for the V series Cars. I know if I were in the market for a Cadillac those would be the ones I’d be waiting for especially the CTS-V. The Coupe will definitely help ATS as well. They also need the much rumored Convertible. If CTS-V and ATS-V can post some eye popping Nürburgring numbers which I think they will, it will give Cadillac a good run of free press publicity.
What If GM offered a 320HP Regal GS?! What would happen to the ATS?
Can someone tell me what XTS means?!
Hope they don’t call the LTS, the LTS. Imagine a car like the Elmiraj or Ciel named LTS…
GM should get rid of Buick… a few months ago Motor Trend compared the Regal with the BMW 328i and the equivalent Mercedes… a Buick?! Shouldn’t it be a Cadillac?
Buick can’t add power to its cars because it enters Cadillac’s territory and Cadillac can’t lower its prices or offer models like the MB CLA because it enters the premium market where Buick is positioned.
I think GM has serious problems with it.
Caddy and Buick do not directly compete. Firstly, you assume that Caddy shoppers are really GM shoppers who cross shop corporate brands. While some older shoppers are GM loyalists,
GM can easily maintain two unique luxury brands: Buick as the understated “Doctor’s” car and Cadillac as an upscale in your styled marque for drivers with a need for speed.
Hyundai Group makes huge profits while competing against each other while also competing against other marquees. Buick and Cadillac don’t compete in the same manner with each by chasing different market segments and demos.
GM needs to recede further into the background with its brands each taking center stage. This is the role of marketing and brand management which had been a huge problem so far.
“Can someone tell me what XTS means?!”
It means “Large touring sedan for livery services that squares nicely against the ES and MKS”. Good for old folks and funeral services, but nobody looking an the XTS is waiting for the LTS.
If you’re still hung up on names and you can’t let go of the past, the XTS means “eXtenuated Touring Sedan”.
http://dictionary.reference.com/browse/extenuated
“Hope they don’t call the LTS, the LTS. Imagine a car like the Elmiraj or Ciel named LTS…”
It would make sense as it would fit Cadillac nomenclature. Besides, what mainstream luxury automaker is using names that make their cars look alienating when compared to the rest of the range?
That is just it cars like the XTS are not and never were considered a flag ship by GM but a handful of people still consider it one.
The truth is the XTS was a hold over form old GM and was put into play much like the Captiva. It would pick up sales at first and then be relegated to fleet status. This way it will protect the CTS and other models from being killed in resale as a fleet car. How many DTS owners have lost their shirt on resale?
Just look at how much the Town Car went for used. You could pick one up and park it our in front of the trailer park rec hall real easy. That is what makes it difficult to build an image and Cadillac is learning how to deflect the fleet sales and focus the main line product.
The LTS will be the flag ship until there is a time where Cadillac’s image can support something even more expensive.
Think big picture and long term here. One model and 5 years will not do it even with the best car in class.
Your not selling Malibu’s vs. Fusions here.
I’m not hating on Buick its a good brand. Just what would u do if u wanted a new gm luxury car so u pull into an auto mall Buick on one side and Cadillac on the other u look over at the Cadillacs and notice the price. So u go over to Buick and u see its only 40000 compared to 50 or 60 grand . thats what most people are going to do. They will see the better price and go for it.
“So u go over to Buick and u see its only 40000 compared to 50 or 60 grand . thats what most people are going to do. They will see the better price and go for it.”
Then those people aren’t luxury consumers. Simple.
You Americans make bourbon. Some bourbons are sweetened gutter water for teenagers to get drunk off of. Some bourbons are acceptable to serve guests at dinner. Some bourbons are for slow sipping and savoring at the end of a day.
And some bourbons are bourbons that you add to a collection; that you only enjoy on occasions that are worthy or that call for celebration. They are your Woodford, Bookers, and Noah Hill 15. They are special bourbons that smell, taste, and feel exceptional. They pride themselves on the careful distillation, their flavourful assault on palate, and the remains they leave on your breath.
They are luxury products because they offer something that other bourbons can’t. By their very nature of being exceptional bourbons, they distinguish themselves and take pride of place at the higher end of the bourbon market. Their exclusivity, quality of product, and production process pretty much guarantees that whatever they are priced at serves as a reflection of the commitment the distillery made to the quality of the product on offer.
Same deal with Cadillac and Buick. On their names alone, I expect the Cadillac to be measurably better than ANY comparable Buick; the price difference notwithstanding as both brands give different impression in a buyers mind. If a luxury consumer demands a high level of quality and care in a product (cars, bourbon, or otherwise), they will seek it out and own it. Price is not a barrier to them.
Cadillac is in the acceptance phase for the buyer’s mind, it is a transition that usually lasts about 3 years, in which people get to know the van talking about it and get closer to the dealers to know
GM is on the right track, the Cadillac range requires an ATS Wagon; CTS Coupe, LTS, LTS Coupe, Crossover below SRX; and an XLR Roadster hardtop style
With this Cadillac will have plenty of weapons to go entering the mind of the buyer and retrieve that image good car one day lost
When you retrieve that image; cars will sell themselves
Regards from Spain
Two issues here.
One is they are not even half way rebuilt yet . We still have a lot of new product to come yet.
Second you can build a better car but you have to do the time to build a new age and change old perceptions.
The recalls here are a non factor.
The ATS needs a new model and the coupe to spark some life.
In this segment products have as heft life of a loaf of bread.
It is too soon to panic.
Cadillac is showing an offer on their website of $29,821 for a ’14 ATS 2.5L standard collection. That’s $4169 in back of MSRP. In my mind, that continues to be a significant part of the problem for the ATS, it’s just $4-5K too high. It’s a fine car, but I have felt they were too aggressive with the pricing all along. The value equation vs BMW, MB, Audi and Lexus is gone with the ATS , they are all in the same range. The others have big brand equity among the very shallow, superficial, social media crazed audience that Cadillac needs to buy this car. The coupe will help sales totals a little, but there are also other vehicles on the market or coming soon that will take some ATS sales as well. Those include the already hot selling MB CLA, the new A3 sedan and the new BMW 2. Maybe next time…….
Cadillac is no longer playing the value game anymore. The ATS is not overprice.
If you are a luxury customer that wants the best, you will buy the best which are BMW, Mercedes, Audi, Lexus, Jaguar, Land Rover and Cadillac while value luxury is with Lincoln, Buick, Acura, Denali and Volvo.
If Cadillac needs to be taken seriously, they need to stop playing the value game. Those days are gone.
And for as the CLA, they are not selling that well. The dealerships sell less than 1,700 units a month.
The CLA, A3 and 2 series are not in the same class like the ATS. Apples to oranges with the same difference with interior room especially the Audi A3 compared to the ATS.
Most models lack some degree of cool or sophistication. I am interested in SUVs or trucks and the Escalade is waaay too big and it tries to be fancy and fails. They need a mid size something to compete with Mercedes and Lexus. The crossover cadillacs are just Chevy and GM cars with a different emblem, name and a few fancy worthless bangles.
I don’t understand why people on here saying that Buick is taking sells away from Cadillac when it is not.
Buick and Cadillac are not in the same breath and targets towards a different market. Cadillac is more luxury performance while Buick is more serene bargain luxury. If a person looking for value will shop a Buick and a person looking for top luxury with performance will buy a Cadillac.
Now for the Motley Fool BS, they need to point out that large front wheel drive luxury cars don’t sell well costing over $45,000 in comparison to medium luxury rear-wheel drive models that costs the same or more.
Motley Fool fail to point out that the XTS outsells the Acura RLX, Lincoln MKS and Volvo V80 sedans with the similar price tag or lower than the XTS easily.
There are two kinds of car people; (1) people that like cars for what they are but don’t know how to detect a front-wheel drive or rear-wheel drive model, don’t know a difference and know the difference between front-wheel and rear-wheel drive and (2) people that are car enthusiast like we are on this forum. For people that are looking at Cadillac that are true car enthusiast will buy the CTS over the XTS and people that are not car enthusiast will cross shop the XTS and CTS and will decide base on the difference between the two because they are both similarly priced the same and have pretty much the same technology between the two. These types of people here would buy the XTS base on roominess and style while the CTS base on its size and looks as well and could care less about what mission the two have that are different. If you want American luxury prestige, Cadillac is where you go. And don’t start debating about the competition because the same thing is happening over there as well. So in general most people are not car enthusiast but badge snobs and like it or not, Cadillac is beginning to become that way.
So anyone that thinks that the XTS and CTS does not get cross-shop is delusional. I test drove both the CTS and XTS and I prefer the styling of the XTS over the CTS in spite of the XTS’s front-wheel drive and short front overhang.
There is nothing wrong with CUE. If the SRX sells are strong after 5 years, then obviously CUE is not a problem. SUV have a stronger market than cars regardless if its from a bread-n-butter or a prestigious brand.
Cadillac does have a marketing problem to some degree and that needs to be fix because I don’t see them advertise much and the only sitcom Cadillac do advertise is on IFC and Pirelli World Challenge race which comes on weekends and thru the local TV stations.
Same as for a dealership overlap as well. There are over 900 dealerships across America and 300 plus dealerships each for Mercedes, BMW, Audi, Lexus, Acura and Infiniti. If you take a look at the ratio of sales of each brand, BMW, Lexus, Mercedes and the competition will sale more cars in the day and week than Cadillac will sale in a day and week. So I would imagine that the sales people don’t stay long at Cadillac and work for another dealer where sales are strong at the competitor dealership. Also too some Cadillac dealerships are within 12 miles from one another which is not good business in my book. If you think about it, the BMW, Mercedes, Lexus dealerships will have more informed people than the Cadillac dealership because they been there a lot longer and they are making more sales in select few dealerships compared to sales people that work in Cadillac dealerships that does not stay long because overlap of dealerships in this country that supply is greater than demand.
If you don’t believe me, I challenge that each of you do a google or Bing Search of Cadillac dealerships in your state or go to http://www.cadillac.com/luxury-dealer-locator.html and do a city/state and search only for that state for the whole state across with 4 or 5 different searches with a new major city for that state and do the exact same thing for the foreign luxury brands and you will see what I mean. DO NOT type in the ZIP CODE because it will stay in memory and you would have to start all over again.
For example in TN, Cadillac has at least 17 dealerships while Mercedes has 5 or 6 dealerships in TN. I would not stay at a Cadillac dealership long especially if I can’t make a sale a week compared to Mercedes or BMW store that are spread apart within 100 miles each compared to Cadillac which has a larger volume of stores within 12-17 miles on average. The only way you can survive as a sales person at a Cadillac dealership is that it is joint with another brand like Chevy, Buick and GMC which a lot of them are across the country. The Cadillac dealerships that just sales only Cadillacs are the ones that will struggle with quality sales people or maintaining them.
Most people are waiting for the ATS Coupe to come to course same as the V-Series. The Escalade and ATS Coupe will push sales for Cadillac again like last year. Nothing to worry there.
I don’t understand all the Buick hate. They have great quality ratings, and is great for purpose of fighting Lincoln and Acura.
I don’t think Buick steals sales away from Chevy. Anyone who can afford to buy a Buick would be looking at an Acura or Volvo based on price point and not a Cruze or Malibu.
GM is lucky in that they have the ability to compete in the three main price point categories.
People this is only the top of the third inning. Let GM play the whole game once you hold the information that they hold things will better fall in place.
To comment on GM at this point is like telling Da Vinci’s sculpture The David was a bust because it looks like a semi block of marble. You have to let them finish the partial work they have started. We are only half way in the GM rebuilding and Cadillac and Buick both are the last two to see the new products.
I would also like to add we also need to give Buick some more models and time to make sense of where they are going.
Right now we have people judging Cadillac on only two really new models with the CTS and ATS. The XTS is just a left over transition model from before the bail out. Yes that car was started back then. The SUV has one update with many more to come.
Buick is mostly a mix of old models and platforms from Buicks past and Opels past. Good cars but not fully were Buick is headed.
Cadillac will be distinctly American but able to compete with the Germans and beat them. Buick will carry a softer style with a more Euro flair that sits them between a high end VW and low end Audi.
Cadillac and Buick will appeal to two separate groups in the end much like the styling on a Equinox and GMC Terrain appeals to two different buyers.
To be honest Pontiac for years tried to be GM’s euro influence car as that is what Delorean really wanted to take them. They never did a convincing job of that even thought they did have some interesting cars. Buick today is in a place where they can go there and do it convincingly.
But to do these transitions it will take time money and man power. You will not do it over night or with only a model or two.
Also you will dominate the market for a while as you need to earn your place. In the early 70’s BMW was that odd sporty small sedan that rusted out. It took them 10-15 years to become the darling to the image conscious buyers.
That is the Key for Cadillac. The people who understand cars can be won in a model year. Those who are the majority of the market who like the car to present an aura around them and project an image take time to win.
The truth is we all could get by with only a Cruze. It takes money and ego to buy a BMW. The car has to deliver to the ego with image and that has to be earned.
Buick will have an easier time as their lower cost will help make the ego adapt a little more easier.
Cadillac needs a complete product line to compete with Mercedes and BMW
Cadillac needs a convertible, station wagon, three row cross over and a large rear drive sedan
Well they are getting two of the three and maybe the third once they go to Europe.
They do not have to meet the Germans on every model just the ones that make money.
Allow me to add. Buick models are all FWD based which apparently is the plan going forward. Cadillac, with the exception of the XTS and SRX uses RWD platforms. The XTS simply fills a gap until the coming senior sedan is ready. My local Cadillac dealer stocks a variety of XTS Vsport editions and sells them with ease.
IMHO opinion, as a 2013 ATS Performance Edition 3.6 owner now nearing the 2 year point, Cadillac absolutely must step up the quality of dealer service BEFORE the coming senior sedan hits the market. A close friend owns an early build XTS and simply isn’t pleased particularly with service. We discussed the senior sedan and his point? If Cadillac prices that new model near the Mercedes S550 point – service absolutely MUST be at a much higher level. And getting this issue across to potential customers will be critical to success.
Another point. The CTS Premium 3.6 pricing lands right on top of the XTS Premium. IMHO the new CTS is simply priced too high and apparently Cadillac is getting that message loud and clear. I cannot wrap myself around a 2.0T CTS with only a 6 speed automatic priced around $60,000.
Perhaps the entire pricing issue will disappear with the introduction next year of the senior sedan – and – I hope the XTS quietly ends production.
Recently a fault emerged in the Driver Assist program which Cadillac solved by replacing the motors in the driver’s seat and both recalls were performed at the same time. I recommend to those with the 3.6 having an unsteady idle situation, replace the OE airfilter with the K&N piece recently available (finally). The difference immediately is remarkable at idle.
My ATS is a joy overall. I’m taking another long trip shortly, same trip I took in May. Never got tired, seat is so comfortable. Overall mileage on that first trip was 25.8 mpg. This time with the K&N filter and new Magnaflow mufflers, I expect an improvement – but we shall see. And you know what? I like CUE and find the constant negative comments from reviewers ridiculus. They jump in a Cadillac and drive it a couple days and then bitch and moan that they couldn’t figure out CUE. Yes, it took me a while because I’d never had a vehicle with such a complex system and I’m not good with such. But I learned it and use it with ease.
My other closest friend bought a new CTS Premium Edition 3.6 loaded with the Kona Brown interior and the fancy instrument’s. Loves it. It’s in Majestic Plum. My ATS is in Glacier Blue with solid black leather interior. The other friend’s XTS is triple black.
Cadillac’s problems are simple but significant:
1) edgy styling is too controversial, it turns off a lot of customers right off the bat.
2) the marketing message is not consistent. Cadillac can’t effectively woo buyers of taut European touring cars, aging baby boomers who like big floaty isolated cars, and hip-hop bling buyers all at the same time. Pick one and move on.
3) complexity and feature count is not winning over customers, who have found that they get plenty of gizmos on cheaper cars. luxury buyers are much more interested in lifetime value: better services, better warranty, better vehicle design, better vehicle construction and NO RECALLS. Without consistent quality, other carmakers like Lexus and Audi will remain preferred luxury brands.
Here in Canada we have “Buick/GMC”, “Chevrolet”, “Chevrolet/Cadillac” “Buick/GMC/Chevrolet” dealers, (there may be other combinations) not every dealer sells Cadillac (fewer yet sell Corvette), so for many of us, Cadillac is not even available locally. I really do like the cars, comparably priced to a well optioned Chevy Silverado crew cab, but the Chevy dealer is about 2 km away, the Cadillac dealer is about 800 km away.
Ford will be the big winner because of the tremendous cost saving of making fiesta , focus, fusion etc ( not including mustang, transits and explorer) the same over the world. ThiGm needs to cut all brands around the world and leave just chevy and either buick, opel or Cadillac.
Pretty soon they will not be a le compete with ford.