The full-size truck market is getting more competitive, requires more innovation, new fancy features and, as a byproduct, has a shrinking profit margin. How does GM plan to help save the profit margin found in trucks like the 2015 Chevrolet Silverado or 2015 GMC Sierra? Simple, they will revitalize Cadillac.
For more than a decade, Cadillac has languished without getting much support. Now, with the changing truck landscape and growth in the luxury market, GM is investing a substantial sum to re-invigorate the brand and its profits to offset shrinking truck markets.
According to NASDAQ, Cadillac President Johan de Nysschen pointed to lower truck margins as a key reason for need to revitalize the brand during a business plan presentation. He said flat out, GM needs Cadillac’s profits to offset the new truck innovations tied to meeting rising fuel economy requirements.
In the next five, 10 and 15 years, trucks will undergo a radical shift from the gas guzzling V8 beasts made of heavy steel to more efficient and lighter varieties. In order to do this, GM will need to incorporate more expensive materials, develop new engines and 8-, 9- or 10-speed transmissions. This will cost them a substantial amount of money and Cadillac, because of its profit margins, will be leaned on for this.
Comments
So in other words, Cadillac’s engine and transmission tech will be leveraged among the Chevy and GMC brands fullsize trucks ad SUVs? So it’ll be much the same how it is now: with apparently Cadillac debuting GM’s newest engine/tranny tech first, then passing it down instead of the other way around…I guess this means Cadillac has some impressive tech to soon debut!……Whatever you say GM……..
That’s how it should be. Luxury leads. The newest and best technology and features debut there and then trickle down over time. It’s only fitting that Cadillac should serve to showcase GM’s technology first.
To consider the opposite, think of how Fords’ approach with their new aluminium truck frame. Why didn’t it debut under a new Navigatior, showing how Lincoln is leading the way in material engineering? Instead, Ford is trying to make the aluminium platform “trickle up”, which only serves to undermine Lincolns relevancy. By then the novelty and uniqueness of an aluminum truck platform will be lost as it will become commonplace when the new Navigator arrives.
de Nysschen has a point, Cadillac is where the money’s at. Grawdaddy is bang on with the “newest and best technology and features debut there,” comment. Just look at Merc’s S Class. Thing is, de Nysschen is a tad close to exhibiting hubris. His comment reminds me of an auto dealer back home who once told the City that putting in a median in front of their business on a heavily used road was a bad idea because it was the dealership that made the city what it was. A couple years later the dealership was gone, replaced by one that truly had their clients’ wellbeing in mind. The new dealership is doing gain busters business, and has publicly thanked the City for building the median that made the road safe and increased its business.