If it wasn’t apparent from the new ATS and all-new 2014 CTS, General Motors is very serious about Cadillac. GM Chief Financial Officer Dan Ammann shared the automaker’s sentiment about the global luxury brand in a recent interview, stating:
“Cadillac is a critically-important part of the GM story. We’ve been investing significantly from a product point of view in the Cadillac portfolio, you’ve seen evidence of that in the marketplace with the launches — ATS, XTS, new CTS coming, and the whole portfolio, across cars, crossovers, and to the truck portfolio — so, Cadillac — incredibly important both here in the U.S., North America, around the world, it’s gonna be an important part of the growth equation for us, and something we’re putting a lot of resources into.”
In discussing how GM sees Cadillac’s growth strategy compared to those of its most direct rivals, Mr. Ammann added the following:
“We’re not after volume at all costs, we’re after building the brand, we have a lot of opportunity to grow the business from a volume point of view, but it’s not a purely volume-driven strategy, we have to grow the business a very orderly and profitable way. We pay close attention to what all of our competitors are doing, we make sure we understand what’s going on in their businesses, but we have our plans and our strategies, and we’re executing to those while taking into account the competitive dynamics in the marketplace.”
The GM Authority Take
Cadillac’s importance to The General from a competitive perspective revolves around profitability, a metric by which The General currently lags its closest competitors such as the VW Group and Toyota. Clearly, higher profitability furnishes GM with the proper financial resources to spend on making better products — in turn making it even more competitive. Currently, the brand has tremendous growth opportunities in markets outside of North America, namely China and Europe.
And while it may not be “volume at all costs” for Caddy, overall sales volume is still a vital factor when it comes to the long-term longevity of the brand, and the quality of its products. It seems that what Mr. Ammann is suggesting here is that GM isn’t planning to offer steep discounts on Cadillac vehicles to chase volume (something some of its competitors do from time to time), while building out the brand and its portfolio carefully and responsibly (good thing the Lambda-based Cadillac crossover is no more).
Overall, this strategy differs greatly from that of the Cadillac of the early 2000s.
Comments
If people would just analyze each car and truck for the segment that they are in, and stop comparing each car and truck to competitors that cost much more, and stop holding caddy back because they are new in a certain segment then I think Cadillac would have no problem get back to the number one spot again!
Unfortunately a article, review or comment can’t be made without referring to Cadillac s past, or what cars they don’t make, cars they need to make!
They send so much energy focusing on what Cadillac isn’t as apose to looking at how well a certain car or truck perfoms and is put together!
They say ATS is a nice car but this is the first car Cadillac has in this segment, while losing site of the fact that it’s as good if not better than it’s competitors!
CTS and XTS have similar stories!
It’s just sad!
You talk a lot but lets make it more simple.
Cadillac may only produce 30% of the cars GM sells but they make 70% of the profits the cars sell (Numbers are Approximate).
Outside trucks luxury brands make the highest profits than any other vehicle. Generally it cost little more to build a Luxury Car but the selling price can often be 3- 4 times more than a Value segment car like a Chevy.
It is simple GM makes Cadillac strong and increases profits. They do not have to lead the segment or win the segment as they just need to be competitive to make profits. But they have set the proper goal to be the class leader and are showing signs they may just pull it off. It will take time but they can do it.
Now this is one area Ford Dearly Lack in. Lincoln today is still in bad shape and still has a lot of work to do.
Advanced economies like Germany put a keen focus on luxury brands as opposed to value due to high labor costs. Detroit did something similiar with trucks. GM is correct in that Caddy must be re-built for the long term health of the company and the avoidance of a PSA France-like future.
Chevy production should be slowly outsourced to Mexico or other low cost economies.
Caddy has a bad rep due to past line ups and I almost think a new marque might have reaped stronger rewards. This explains GMs focus on Tesla’s rapid growth. Also, I am rather taken with Hyn/Kia’s efforts at creating full-line brands the range from value to soft luxury and see this as probably the best overall plan for a company like Ford and even Buick.
I still believe that GM has space for two luxury brands, one soft and one preformance, in today’s uber-fragmented market.
I am also curious to see if GM could sell premium Opels (at a premium price) under the Chevy name plate in developing markets. Such a move would reduce the need for new distribution networks and costly brand-building. I love the notion of Insignia or Lacrosse by Buick, Opel, or Chevy depending on market. This type of move would be a great way to boost margins in addittion to Caddy.
GM must learn to lead the automarket again and this is no easy task.
I agree with what you said which is why I disagree with the idea Cadillac has to have it’s own platforms engines and running gear!
Everything should be shared as much as possible!
Cadillac is going to have to share much as that is the economics of scale in todays market. Just look at how VW has leverages shared platforms and engines in their divisions.
The key element that GM has to follow is to do so very wisely. You can not put the same identical engine in a Impala and then offer the same engine in the top time XTS. So far GM is doing this as you can get the XTS with AWD and TT V6 but neither are offered in the Impala nor will be offered unless the Cadillac moves on to other things.
The key to Buick is while it may share an Alpha it can not be a ATS like car and has to offer different feel and looks to the point no one will see the family heritage or linage.
On the other end of the engines Cadillac will have to share but they should always be given different tunes and the highest power and technology.
I also advocate that Cadillac dress the engines in higher quality materials. Stainless bolts and powder coated aluminum covers etc. I would love to see an engine that would make the owner want to open the hood to show like the ZR1. I know they use the plastic covers for sound but they look and are cheap.
The real key for Buick is to be much more than a Chevy and enough less than Cadillac to carve out their own area. GM when they had all the divsions had a hard time making each division special as it was just too damn expensive. So you ended up with Pontiacs that were just fancy Chevys and in some cases performance cars with no performance and Buicks that were stuck in time and lost appeal with younger buyers that were snapped up buy older customers that could not afford the Cadillac that just had more chrome. Back when Olds was still around the lines were even closer.
Everything must be shared just like Toyota and Ford do. Honestly, GM never needed to blow billions of Caddy-only platforms and could have adopted a Buick like plan like Toyota has with Lexus and VW does with EVERYTHING!
“good thing the Lambda-based Cadillac crossover is no more”
It isn’t? I haven’t heard that. That’s terrible news.
There’s a huge gap between the current SRX and the Escalade. Not only in size, but in price. Caddy is missing an opportunity if they don’t fill this gap.
And will lose one customer, besides. I have a gen-1 SRX that is getting up in years. The new SRX is too small to be an adequate replacement for me. So, I’ll likely go elsewhere.
There are rumors of a 3 row cross over based on the Omega platform
So whats wrong with the buick version? Are you to good to sit in a buick! Not name enough to make your friends happy? If it’s space like you say then the buick version would be just fine but I’m thinking there’s something else that your not letting on about!
It’s a Buick. If a Buick was good enough we could drop Cadillac.
Different segment/market. (We have two enclaves in our driveway)
Sloan’s ladder is dead in a fragmented market. I say take Buick even further upmarket in an effort to grab different demos.
The days of people choosing to shop GM and then choosing between marque are long over. A strong Buick will not harm Caddy. A preformance shopper will never enter the showroom for a ATS and leave with a Lacrosse; he or she will seek out BMW or Benz. Meanwhile Buick must move upmarket to fight cars like the new Aztera, Acura and even Lincoln. Now that Lexus avoids plush there is a huge new market for Buick.
Well Cadillac is going to mover farther up as time goes on and Buick will fill the void. In time there gap between Chevy and Cadillac will be the grand canyon and Buick will by them have the proper product to fill the needs.
The reality is you have yet to see much of the Future of Buick yet. In the near future it will start to make sense with each and every new model. Buick right now is just living on borrowed and left over product out side of the SUV’s.
This is only true if Caddy is successful its efforts at moving up market. The verdict is still out on how both American and Chinese buyers react to the brand. While ATS is doing well, the car isn’t breaking records yet. Clearly a first gen car takes time but GM has been working on the brand for over one decade.
Buick provides a second root to premium for GM. The price point is slowly going up here and in China. I do not share your view regarding Buick cars being borrowed leftovers and argue the recent small sedan was not so much intended for Opel’s Astra series but instead placed there. I do agree Buick is about to transform into a more modern brand, though.
That is just it there is no if on Cadillac moving up. The way it is they have no choice. They either compete with the market leaders or they become Lincoln and risk fading away.
As fore the ATS and coming CTS they are not going to break records out of the gate. This is a plant the new product, build on it and at this point Buick really has not shown it first true totally new product at this point. They are the last to get anything and will just start to show that soon. The new Opel Show car is the first of the joint products that we will see that were done by GM as cars intended for both from the start.
We also have to remember Cadillac is now intended to be a lower volume brand that sells for a higher price. No more Cadillac in every drive way as that cheapens the image.
Porsche and other brands have learned this in the past and now only embrace more expensive and higher priced cars.
The repair of Buick and Cadillac will not come in the next 5 years and may only be getting stronger in 10 years. There is a lot of work to do and GM is doing what is needed. They are building competitive product for Cadillac now and it takes time to earn trust and reputation in this segment. BMW took 10-15 years to be come the market darling through the late 60’s to the mid 80’s to become the must have car. They started with the 3 series and took it from there with each and ever model. Not all of them were great but they did react and correct the mistakes fast as we are now seeing at GM.
GM does not build cars like they used too. Lutz came n and removed many of the barriers that prevented mistakes for being corrected and changes being made with out going through 15 levels of management. Today more people were it counts are enabled to do what is right and not have to ask. Are they done correcting issues in management no but they are still gaining ground. You do not fix a company like GM in 5 years no matter who you are.
Actually, I’ve been looking at the GMC Acadia. My wife isn’t a fan of the appearance of the Buick.
So, yes, GM won’t be losing a customer in all likelihood. But Caddy will.
I don’t even know how I ended up right here, however I assumed this put up used to be great. I do not know who you’re however certainly you are going to a well-known blogger for those who aren’t already. Cheers!
Thanks….everyone on here makes great points.
The main challenge for Cadillac is to have a clear brand identity. 10 years ago, Cadillacs were poorly engineered and built cars. Then they started to make cars with a distinct design ( not everybody’s taste but that’s fine) . Still, they were positioned too sporty, especially the V versions. Cadillacs used to be renowned for their style, luxury and comfort.
Rather than aiming for BMW customers, they schould target Mercedes customers.
I do think it is good to hear that they want to build the brand slowly and in a quality way.
GM has to make great cars and continually improve them. That’s how you build brand entity. It is a long process but that’s the only way. There is no magic formulas or shortcuts. Audi, Lexus, and Hyundai showed that it can be done. It is a painstaking process that takes a lot of time and focus. That focus was missing in the past. And it is especially important for Cadillac. At least finally it is going in the right direction. GM was right to focus on sportiness for Cadillac. Sporty brands develop rabid fans and have wide following.
“It seems that what Mr. Ammann is suggesting here is that GM isn’t planning to offer steep discounts on Cadillac vehicles to chase volume (something some of its competitors do from time to time), while building out the brand and its portfolio carefully and responsibly…”
This is a must. I feel the new GM is doing this much more so than in the past, doing so with both Cadillac & Buick. Look at the facts, not long ago, Cadillac only had the Escalade, SRX & 2nd gen CTS in their portfolio after killing the STS & DTS. Since, they have added the ATS & XTS and refreshed the SRX. A new CTS, ELR and Escalade will be here within 6-8 months. I’m sure the small CUV will be shown by the end of the year or early next. That market is growing too fast for them to be left out.
Buick has done the same thing starting in 2007 (Enclave), dumping the old school Lucerne and adding new compact & higher performing euro-based categories (Regal). Slowly but surely, both brands are being rebuilt and repositioned in the market.
“I know they use the plastic covers for sound but they look and are cheap.”
I totally agree that the engine compartment is a way to differentiate Cadillac from the rest of GM. Replacing the round logo on the engine cover of the V6 VVT motor of the XTS/Impala is a sign of the old GM corporate think. This initial ATS engine cover was even worse! (COPY & PASTE LINK) http://www.lautomobile.ca/daily_images/1000914885-1000914971.jpg
I’ve noticed a few people mock Buick’s use of Euro-based Opel cars and think these posters miss the critical point that these vehile’s were designed as global offerings with much input from GM Korea.
In addition, Ford and even Chrysler have decided that European design will be the face of global design–Focus, Fusion and the new Mustang demonstrate this.
I don’t see there really being so much of a modern American design language, retro aside, anymore.
Caddy tried, but has since ‘evolved’ and in order to please Chinese buyers. (Oddly the Kia Optina is maybe the most American because it looks somewhat like an old Pontiac Grand Prix.) I can’t help but feel that Caddy is the middle of yet another design reboot. ATS was designed pre reorganization and CTS looks like a Benz knock off. I am rather curious where they will take us with the new flagship and if any Art and Science will remain.
The idea of having kool looking engines in cars went away years ago, I wish chevy still painted engines chevy orange!
But the fact is less than one % of the people who buy cars care less about showing off the engine under the hood!
Most people don’t even have a clue of what thier looking at! Do you think house wife or grandma is going to be rasing the hood anytime soon? Naaaaaaaa
Spend what money you where going to spend on making the engine compartment kool on other things around the car where most people will notice!
On the contrary many of todays premium cars are working more and more on how their engines look.
Some to the point they put it under glass in many cars when possible.
The thing is many people in the upscale markets are more knowledgeable about cars and often appreciate the details that many in the Camry class lack.
Too often in this class appearance is perceived quality. Cover something in hard black plastic and it is seen as cheap and reflects on the entire car. When you have higher details to many engines like from some of the premium marks it gives a sense of engineering that may or may not be there but it gives a greater impression. In a car in this segment you need to impress on anything that opens no matter if it is the hood , gas door or glove box.
Cars like this appeal to the senses of touch, sight, sound and smell. It has to appear superior in all of these segments.
Some may be of poorer quality but if they appear better they still win.
The cost of powder coat and some dress items are cheap and buy a lot of perceived value.
This segment is about more than Chevy Orange paint.
Note the level of detail applies to all areas even the rocker sills and even the trunk and not just the engine.
I couldn’t have said this better myself. GM is BETTER than badge engineering on cheap plastic covers. Perceived quality is huge. Once something LOOKS well built and is, in fact as reliable, dependable and as well built as it looks, buyers will be flocking to buy their products.
In the passenger car segment, GM has come so far from badge engineering. An XTS doesn’t look like an Impala or LaCrosse. The Malibu doesn’t look like a Regal either. The Verano and Cruze look similar but the eight side window design is something the Cruze does not have. I am proud of how far GM has come from a styling standpoint. I just hope that poor long term reliability doesn’t stop the forward momentum.
Not only do these cars not look like each other but with each new model on the platform they add more refinement.
The Impala has benefited by much that was learned on the XTS and Lacrosse. As time goes on they fix things and make it better when it was pretty good to start.
The key on the Cadillac is the engine is going to be the same thing that is in a pick up truck looks wise with a cheap plastic cover. I think they can do better and for a car that will be $80-90K+ they can and should do better.
It is details like this that make a difference in this class. Things like the sound of the glove box door or console shutting or other details like the door handle feel. If you put a cheap plastic handle from a HHR in a LTS that would send the wrong signal.
Don’t laugh but my HHR SS has the same wheel as the Corvette ZR1 with only a different center emblem. Good for me but it sucks for the guy who paid $100K+ for the car.
At least they fixed this in the C7.
All I know is that I have a new Cadillac ATS and just love Its ; get some looks from lots of other drivers…especially other Cadillacs and Bmws…..a good feeling really 🙂