Earlier in the week, during the 2015 North American International Auto Show in Detroit, the New York Daily News caught up with Cadillac president Johan de Nysschen and asked him his opinion on what auto journalists and the media don’t understand about the Cadillac brand as it stands.
“Cadillac has moved on from being a US-centric brand,” de Nysschen sad. “We’re building brand power … and the brand faces different challenges in different markets. Whether the business comes out of China or here … it doesn’t matter,” he added, referring to the popularity of luxury brands in China.
“We are busy with an evolution of the brand, and if we don’t evolve our brand we will get left behind.”
de Nysschen also took the American media to task for focusing solely on U.S. sales, especially with the CTS. Overall, Cadillac sales in the U.S were down 6.5 percent for 2014, yet de Nysschen said the CTS is a premium brand that can’t be compromised by rebates and incentives. “CTS sales have broken through the $47,000 average transaction price in 2014 for the first time … that’s better than BMW.”
So while, yes, Cadillac is fighting an uphill battle with its pricing strategy — even recently announcing price cuts — the customers that are willing to pony up for what is the most athletic car in the segment give the brand some silver lining.
Comments
Well Duh!
The name of this game in this segment is not so much volume but profits.
Once GM gets things going here they will have a nice balance of both. To beat Benz and BMW you do not have to out sell them volume wise but you do need to make more money in the market you are in. Were not selling volume cars like Chevy or competing with Lincoln here.
The name of the game is volume AND profits. It’s about a balance of both.
With each additional unit sold, economics of scale reduces the sunk costs and increases profit margins.
Do you honestly think that Cadillac wouldn’t give its V card to beat BMW, Benz, or Lexus on volume?
Anyone who is familiar with this segment, knows that the CTS is a superior product to the 5 series. Actually, I think the 5 series is at the bottom of the pile. What I would like to know is Cadillac’s profit margin per unit vs BMW’s, as higher transaction prices does not necessarily means a higher margin. My daily driver is a E90 335i, but i can tell you guys that if i was in the market for a larger car, the CTS V sport would be my first choice, as i think it is easily the best product in Cadillac’s line up at the moment.
This is all well and good for Cadillac, but a new 5 is on the way. It’ll be interesting to see how the CTS will hold up.