Small is big in the premium sector these days. At least that’s what Cadillac’s new vice president Johan de Nysschen has been preaching at Infiniti for the last two years.
As the former head of the Japanese luxury brand (and previously Audi North America), de Nysschen believes “there is a strong component of young people that are beginning to enter the market. By the end of this decade, 80 percent of sales in the premium sector will be to the Millennials,” writes Automotive News.
“All the manufacturers are reading the same tea leaves and coming to the same conclusions. That is why BMW has chosen to go down that route with Mini and now 1 series. Audi has gone in with the A1 and the Q1,” he continued.
Cadillac has already proven it can build a competitive and compelling compact luxury car in the ATS, but can it bring that magic to a smaller luxury vehicle? Better yet, can it translate that magic into sales?
“The whole idea is to begin to position cars with premium brand attributes at price points that are more accessible for these newly empowered premium shoppers, who can’t afford the rest of the range. The theory is supposed to be that they enter brand and migrate upwards,” AN quotes de Nysschen as saying.
Noted by Automotive News is de Nysschen’s struggles with establishing the Infiniti brand as a recognized luxury player. de Nysschen believed that Infiniti needed a “truly luxurious four-door” or a “bona-fide luxury-class racer” to gain recognition among luxury car shoppers. As AN points out, Cadillac is already a recognized brand. Better yet, it will soon have its own “truly luxurious four-door” in the forthcoming LTS and there’s the distinct possibility the Elmiraj concept could be built as the brand’s “bona-fide luxury-class racer.”
It seems then the key to Cadillac succeeding is the luxury small-car segment. As Automotive News says, “the question won’t be ‘whether’ [de Nysschen] should take Cadillac in that direction. His challenge will be doing it in such a way that new small cars wear the Cadillac crest proudly.”
Comments
The question doesn’t seem to be if, but when. And if it will be a FWD Sonic based vehicle or a RWD sub ATS vehicle.
My guess is 3 years out and RWD, because Camaro in 1 year and sub Camaro (i.e. 130R) 2 to 3 years out, meaning a suitable platform will be available.
Certain Joe G.
Furthermore, manufacture Cadillac succeed if too small Crossover
The LTS and brother Coupé LTSC, and remove the idea to make the Escalade-V
Regards from Spain
Exactly what needs to happen, get Cadillac a small rwd car platform which can be shared with Chevrolet as a sub-Camaro BRZ fighter.
Well here is what is up.
All Luxury car makers will enter the sub compact market. They have no choice as the regulations have driven them there as also the cost of fuel globally in many countries.
Second I would not bet the bank on a small RWD as Benz and BMW have entered into the small FWD market the area they said they would never go. That should be a telling sign of how desperate things are.
Cadillac can and should do a small FWD but it can not be too much bases on a Chevy. GM has more experience and can do it properly if they invest wisely.
I would love to see a small BRZ fighter and GM is looking into it now. The Camaro only being a V6 and V8 is not just by chance. But the real issue is the BRZ and other small RWD coupes are not selling very well. Chevy wants one but it is hard to make a business case at the numbers they may be looking at. Now if you do entertain a small Cadillac and configure it to where it would not compete with the ATS you can charge a higher price and help with volume to make the Chevy case more attractive financially.
You have to really think this through from top to bottom as it is more involved than just let build it.
I hope they find a way and I know they have a lot of support but it still has to prove it can earn its way.
The CLA and Audi A3 both start at around 29,000 while a base ATS starts at 33,000 so I don’t think it’s necessary for Cadillac to make subcompact especially when the A3 doesn’t even offer standard alloy wheels.
All cars have alloy wheels.
As long as its not FWD or that weaksauce front-biased AWD you get on Volvos and Minis, then I saw bring it on! I might actually get one, if its priced right, and RWD.
If Cadillac can figure out a way, let it be a RWD car to slot below the ATS. It’s not like it would be too hard to undercut the 2 Series in MSRP, which is overpriced. Like everything else in that lineup. If not, an A3 fighter.
The only way Cadillac can make this vehicle standout is to apply everything they’ve gathered from the creation of the ATS and implement it on a smaller package, multiplied by ten. It’s pretty crazy seeing all the top-tier luxury brands tread water in the compact sedan segment; quite frankly, to see Cadillac even considering such a vehicle seems to be a bit of backwards thinking to me. Not too long ago, Cadillac was flagged for building “cheap (affordable) luxury” cars, now it appears they need them to help sustain business? Quite strange……. But I see the logic of luxury compact vehicles: attracting younger buyers to the market, which is wise and is proving to be profitable. Should Cadillac go this route, could this mean there may be some use for the platform that underpinned the Chevy Code 130R concept?
I do think this would be backward step for Cadillac. Unlike Mercedes and BMW, GM already has an “affordable luxury” brand – Buick.
If there need to be cars in the $23-28k range, let Buick build them. Cadillac doesn’t have the cachet the Germans to go down-market and still be luxury. Caddy should be focused on proving they can build cars worth $70-$100k. Once they do that (which, frankly, is going to take quite some time), then they can worry about the low end.
I agree with you 100%. If they take the time and put all hands on deck for the next generation Buick Verano they could have a home run. When I am going to purchase a luxury vehicle I am looking to spend at least $40k. You don’t bargain hunt. If so then buy used. Part of luxury means being exclusive…that you have to work hard to obtain it. I am a 25 year old college graduate working on my masters. I can’t yet afford the CTS which is my dream car. But my 2014 Chevy Impala LTZ is doing great. Sure I probably could have gotten a base model ATS.. but why? I want everything the car has to offer. So I simply wait until I can afford it. Even Lexus, one of the strongest luxury car brands stated that they will not dare take their brand down market. They might lose a little cash but they keep their brand exclusivity and prestige. Next thing you know you will see more Audi A1’s and Merc CLA’s around than you do Toyota Camrys.
Roy almost all cars have alloys but he is correct the base model Audi forgoes the Alloys.
Jamel it is not really backward thinking as much as it is a different market today vs. years ago. Things are different today and the luxury cars have to leverage out models as they will not be able to live on high powered RWD and AWD models only in the future.
Now GM has to aces in the hole here. One is they have more technology in FWD than anyone. Keep in mind the majority of buyers want FWD like it or not. They are fooled into thinking that if it is RWD they will get stuck in the snow when the trut is we got by with RWD and bad tires for 80 years with no issues. You can fight the market or sell them what they want.
The real ace is Buick. GM can do a Small FWD Cadillac or they can let this just fall to Buick and skip the segment. Benz and BMW really have no cheaper division and or other model to drop this on and GM does.
My think about this is GM would be smart to keep Cadillac as the exclusive low volume higher priced RWD car and just let the Buick do the matching to the BMW and Benz cheaper cars with FWD and AWD.
There is a slight chance that a small Chevy could happen as they want it but if the small RWD segment cars like the Subaru, Toyota and Hyundai do not sell any better it will be hard to approve a business case. These cars have been sales disappointments and only recently has the Toyota and Subaru have been approved for a second gen. They had been in limbo and will come back with some changes to the formula.
As for the Code 130R we may still see it but forget the show car. It would be RWD and Turbo 4 powered. But there is a force in GM still wanting a FWD coupe to compete with the better selling Ford and other FWD coupes that dominate the market.
I want the RWD too but I am worried that the market is not in our favor right now.
I might add BMW and Benz do have Mini and Smart but they are limited in many ways vs. a whole division like Buick would be in this segment. Smart would never be able to sell a car in this range and Mini is having trouble reinventing the Reto image. Lets face it they are somewhat locked in with some restrictions. They are trying to break out but it is difficult.
There shouldnt be a car under the ATS and here is why……..Cadillac’s goal shouldn’t be sales….it should be about refining the models so they will be more luxurious and ahead of its competitors…….GM has what Mercedes and BMW dont have multiple profitable brands…..yes they have smart and mini….but they don’t have space such as chevy, gmc,….so they have to sell them with the badge for it to sell…..buick already offers the FWD luxury there is no reason why the cadillac should go so low to grab sell with a sub compact when the verano is already a great little ride…..id rather see cadillac go up market and exclusive while buick and GMC rake in the cash…..GM has to show the world it can build true glorious cars again cadillac is that brand….so going down market is not a good plan in the long run….
My point exactly. GM has a strong opportunity to approach the luxury car market from two angles: affordable luxury and high-end, exclusive luxury. Buick should focus solely on affordable luxury while Cadillac moves up market; possibly even branching out into uber luxury territory. Forget sales numbers. Cars like the Buick Verano and Encore are proving to hold down the fort for GM.
Build a sub-compact but start a Cadillac sub-brand or don’t build one at all because millenials prefer image with value. The name “Mini, Benz or Bimmer or Audi” names sound cool, young, and their sub-compacts are absolutley affordable on their budget! These brands and their sub-compacts all portray a millenials’ personality. A car purchase is an emotional one… RIGHT! So if “Caddy” does build a sub-compact and called it the ATS Sport or whatever…regardless of how great this car is… the brand does not evoke… “live fast and die young”… Cadillac name does not have this vibe, the name “Cadillac” or “Caddy” is such a drag… it sounds old!
Cadillac has some of the best cars out there dammit but ask any millenial… a “Caddy” does not makes them emotionally feel this way.
Will someone from the GMA staff please send me an email explaining to me why I no longer get follow up emails when there’s a new comment posted on an article I commented on or even subscribed to without commenting. My email is [email protected]
I love the Photo. Look at the BMW slogan over the Caddy.
One thing we all must also consider here is the economy is stagneate and that many people have been down sizing. Those who could afford the larger more expensive cars are moving to lower priced cars. This is one key to the future growth of Buick.
Boomers are now starting to retire and what they saved either was not enough or their spending was too much and they can no longer afford to replace their 3 o5 series with the same car. This is one other reason the cheaper smaller cars are appearing.
A smaller car can be done but it has to be done right. I still favor leaving Cadillac out and leaving this to Buick as GM has this option Benz and BMW do not.
Leave affordable luxury to Buick.
It seems most don’t get why this is happening at Cadillac or even the idea. Here’s how it works people are buying these smaller luxury vehicles for fuel economy, price, and badge. When you buy an A3 or CLA with a premium package your looking at 35k, consider the fact that these are not very performance inspired it’s just a look. The other manufacturers decided to go FWD because developing the smaller platform to make this vehicle would require high cost and r&d. Cadillac wants to do the opposite and give people a performance oriented offering on a platform that has already been developed. This also allows them to drop the 2.5L model from the ATS lineup and replace it with the LWB version from China so it competes directly with C-class, 3-series, A4, and IS. Let’s not forget Cadillac could also borrow Opel’s performance 1.6T (200hp/221lb-ft) as the base engine with a revised 2.0T putting out more power than S3 or close to the CLA45AMG. If you mated these to the new 8 speed or even the upcoming 10 speed, with it’s lighter weight they could easily have another performance marvel with all the attributes a new generation of buyers wants: performance, style and the luxury badge at an attainable price.