BMW, Mercedes-Benz and Lexus have a stronghold on the luxury car market, leaving Cadillac, Acura, Audi and Infiniti to battle it out amongst each other. Cadillac fares pretty well among these second-tier luxury automakers and is even ahead of Audi in sales so far this year, but that may not last if it can’t turn things around.
At the end of February, Cadillac had sold 23,419 cars, a tad more than Audi’s sales of 22,996. Brand CEO Johan de Nysschen is definitely happy to see Cadillac edging out the German competition, but the company’s sales are still down 5.6 percent year-over-year while the rest of the “second-tier” luxury brands have posted double-digit gains. Let’s hope those ‘Dare Greatly’ ads begin to work their magic soon, or Audi will be cruising past Cadillac in sales.
Cadillac CEO Johan de Nysschen has admitted the company’s turnaround won’t happen over night, and we won’t really begin to see what the transformed Cadillac is all about until around 2020. The brand’s relatively weak market performance may stick until it can roll out some more up-to-date products, mainly more crossovers and a small entry-level model.
Comments
Cadillac has a long term plan in place and should not buckle to pressure to reduce prices or heap on the incentives in an effort to temporarily improve sales.
That would further erode brand equity, brand perception and resale values.
The German triplets (Mercedes, BMW, Audi ) did not reach their lofty status overnight.
Cadillac’s rebuild will take many years to turn around after so much neglect and poor e execution.
Pretty much what you said.
I think many of us are fixated on sales volumes and almost solely equate success to it. But as was pointed out, it has and will take time to build a reputable brand image and cache. Along with an expanded model lineup.
I was just reading this article posted on GM Inside News about how the author asserts Buick is what Cadillac should be. They equate Buick’s sales volume to their success and draw the conclusion they’re building the cars Cadillac customers want to buy. That assessment is almost totally wrong! They fail to realize that Cadillac is now going after an almost entirely different demographic, which means the current Buick buyers are mostly traditional Cadillac buyers. Cadillac is now a on the verge of being a top-tier luxury brand. While there will be some models developed to draw those looking for a value proposition, the majority of the brand will feature vehicles with lofty pricing. The purpose is to create a lineup worthy of attracting the elite.
Dave you are correct!
This is a no pain no gain deal and Cadillac’s future lies not with just one or two models and one or two years. This is a case where a plan is made and they have to continue to build to the goal over many models and years to sustain their improvements.
Cadillac is ditching the fake affluent for the real affluent and they need to earn their trust and respect and that takes time. You start Walmart discounts and selling down you will erode any growth in the new direction you go.
The fact is Cadillac is no longer a ultra high volume brand anymore. Cars will be sold in smaller numbers and higher prices. Profits will still be there and they will grow with more models and segments to be added like smaller SUV models and even a sports car or two.
This is a play you have to stay to the final act to see how it ends.
There is no easy way to do this and they will have to just tough it out. Besides if some of these chicken little’s would do the math the percentages while they look large are a small number of actual cars for the volume they are doing. 5% of Cadillac production is no where the same thing as 5% of Chevy production. Same for profits as Cadillac makes many times the profit per unit that Chevy makes per unit.
Fake affluent? You should open your eyes and see who is really driving Mercedes and Audi’s. Except for the S Class, most Mercedes buyers are driving C Class or CLA. Or throw in the CUV’s that don’t cost much more than an SRX. More Mercedes, BMW or Audi owners are fake affluent than Cadillac owners. They want to have that fancy name just so they can feel better than everyone else and re-enforce their snobbishness. They are insecure people who need that name to tell themselves they are better than most.
Generally the Benz and BMW fakes are middle class and leases at best. Generally do have some means unless you buy a older used one. In that case if you are not low income by that point the repairs will drive you to welfare.
The Cadillac’s and Lincolns use to go to the older folks who still reflect the image these marks used to represent. Or to the middle age redneck woman in a Dolly Parton wig.
Cadillac has broken away from that lower income luxury segment and is starting to work to establish a rep to be more in tune to the folks who really have the money to buy these new. It takes time to build an image of a brand to the point that these folks feel the car reflects positive on them.
Many of these cars in this segment are sold on ego and what the car will do for them image wise and that is what Cadillac is working on. Lets face it most people can get away with just a small simple car but image drive many to buy what they buy.
Especially in business a car can send a signal that you are successful and worth doing business with. It is human nature to be more inclined to work with a investment manager driving a expensive car vs. a 20 year old Impala. But then again it may be wiser to work with the thrifty guy in the Impala. LOL!
The bottom line is to get people of money to buy the Cadillac and those who can not afford them to buy a Buick but not feel that they are selling for less. You do that and you can sell a lot of cars.
It’s funny you mention middle age redneck women with a Dolly Parton wig. I know someone EXACTLY like that. And she drives a Mercedes Benz. Sure, older people drive Cadillac’s. But most are affluent and were raised in a time when Cadillac’s were the ultimate luxury car. That’s why they have them. In their eyes, Cadillac is the best. Why do people keep insisting that only rich people drive a Mercedes and fake affluent people drive a Cadillac. Take the S Class out of the equation and I would bet that there isn’t much difference between the net worth of Cadillac and Mercedes drivers. In fact, Mercedes drivers are more the type of person to have a beautiful house on the outside and no furniture inside. They are more interested in looking rich than actually being rich.
There has been a marked difference in worth in the past recent two decades as Cadillacs were much cheaper.
Look at a price of a 2000 DTS and a price of a similar size Benz. Also look a the repair cost.
I see it first hand as I have seen this happen with in my own family. Do not say this out of meanness I say it because I have seen it happen right in front of me.
As for the no furniture. Been there and seen that too as I have seen it with friends. They are generally the BMW people because they are younger. They make a good living at least $80K-100K but they buy a house that cost so much they can not even afford to pay attention. Then they do have empty rooms and generally the first sign no curtains when you drive up.
The Benz people tend to be less fake as they often at least have the money and are a little older. They are the folks who are making a good living yet but not yet retired. The car last till they retire and then they down size in a Benz or to some other car like a Lexus.
Cadillac right now is trying to get in on the younger group to get their leases and the older ones that pay cash before they retire. But while there are these types out there the core group buys or leases and can afford the car are out there. They are still the main target as that is who the lesser buyers follow.
No matter what it is ego and image that drives this segment. No one needs one of these cars you just have got to have one is what they feel.
My experiences are completely opposite of yours. A family member owned an E Class Mercedes and had nothing but problems. He eventually traded it on a Cadillac CTS. He is now on his second CTS because he loved the first one so much. And has had no problems with either one. Swears he will never buy another German car again. In fact, he has had such good luck with his, and it is such a nice car, that he convinced me to buy one. You mention repair costs. It costs way more to fix a Mercedes than a Cadillac.
You just reinforced my point about more Mercedes and BMW owns being fake affluent. You yourself have seen nice houses with no furniture. Just because you make a good living doesn’t make you affluent. If you are buried under bills, no matter how much you make, you are not affluent. Some people equate a nice salary with being well off. Well its not. It’s net worth. That’s why most older people you see driving a Cadillac are almost always way better off than most younger people driving their BMW or Mercedes. They have very few, if any, bills. And most older people seem not to be swayed by fancy names and advertising. Most Cadillac products today are as good or better than their competition. So people who buy the product, not the name, will consider Cadillac. But if it’s the name you are more interested in, you will never consider a Cadillac.
No you missed my point.
The present Cadillacs are built very well and are not of the nature of my in laws DTS that was a Money pit. The North Star cars most with FWD were issue prone in many areas many with the engine and interior electricals. The CTS and the newer you get have been very reliable. Maybe not always the total refined package yet but they are releitvily new to the market where Bens and BMW have been refining the same car for 40 years. If GM can hit close to the mark this early the next gen or two should easily be as good or better in all areas.
As for faux rich here is the deal.
The folks who live in t Mc Mansions and own the leased BMW 3 series may be posers but they still make good money and have to in even getting the financing for the cars and house. Are they putting on the show yes but they are not poor by any means. They are possessed by Vanity and Ego to put on a big show but they still often have the mean coming in but they may just use poor judgment in how they spend them.
On the other hand of many years do you see a owner of a DT Cadillac or Lincoln Town Car at the local thrift store? Many of these owners are people who paid more than half or more for the car than their house is worth. These are the folks who often owned a Fleetwood but lived in a trailer park While Benz and BMW has some of these too it was more prevalent in the past at the American companies. It is becoming less common now and that is good.
Now Stop putting words in my mouth on Cadillac quality in present terms. They are some of the best cars out. Yes like all brands they may have a few things that need tweaked but good cars. Now when I speak of poor examples you need to go back a few years pre 2007 and earlier to the cars like I pointed out the DTS and last Deville’s. These things were nothing but trouble. I wish I had a dollar for all the Northstars with bad head gaskets I have to help people with. The carbon’d up oil rings. The DTS tat you push the button on the drivers window and the passenger one goes down etc. These were the models for which I speak of the fax owners who paid little for these cars that were dumped and we see parked outside the rec hall on bingo night a the trailer park. These are the ones who have curtains because they could not even afford the $400K house with out curtains.
Now you do see a segment of these folks younger in a used older tired 3 series BMW too but that seldom last as the first time something breaks they sell the car as they can not afford to fix it. 318 and 325 were both well known for this.
I guess I really don’t understand your point. My brother In laws E Class was a massive money pit. Sure there were lots of problems with Northstar V8’s, but Mercedes had massive electrical problems in their cars during the 1990″s. And you yourself admit that some people leasing their BMW’s and yes, even Mercedes, are posers. Well if they are posers putting on a show, then they aren’t the real thing. Sure, they qualify to get the car because they make a good salary, but they have no assets. The sign of being affluent is your worth, not the image you project. And who cares if you see a Lincoln or Cadillac at a thrift shop. If they bought it new, they must have been able to afford it, the same way you say about posers leasing a BMW but not having any assets being able to afford it. I see no difference. A lot of people are frugal with their money. Living in a expensive house isn’t important to them. But they are the kind of people that have high 6 figure or 7 figures stashed away. And how many of those Cadillac’s or Lincolns you talk about were bought used. They may have always wanted a Cadillac and can afford a used one, so they buy it. The same way there is a good portion of the population who always wanted a Mercedes, Porsche or other high end car but can’t afford new, so they buy used. We can’t tell people what kind of used car they can buy, the same as we can’t tell people what kind of new car to buy. The thing about a new car is that they can be priced out of range for many, but that can’t be said about used cars. And with cars not changing much, if any, year to year, you can buy a 5 year old Mercedes that looks almost identical to a new one. And pay 1/2 the price.
Never mind………
Scott3 makes an interesting point. Many people will judge a professional by the type of house or car they own. This is particularly true regarding investment managers and their cars. Many people are too easily impressed by an expensive car when it is driven by an investment manager. Personally, one of the brightest, best performing money managers that I know drives an Toyota Avalon. I find it impressive that he prefers to put his personal money into his company’s mutual funds rather than an expensive car. He is a multi-millionaire but you would know it when a parking attendant brings up his car!
Yeah, but how did Lexus/Toyota do it so successfully and so quickly? I know that not building cars that fall apart in two years helped, besides their clever and true advertising, but, there must be something more to it than that. For one, they didn’t price the cars sky high immediately.
Buick sales probably will continue to grow as the old Cadillac owners are looking for a luxury car they can afford . And that is part of the plan . Cadillac is moving more upscale and the price point will go along with that . And hopefully Buick will be the car of choice for that demographic . For awhile Cadillac sales will probably continue to slide because they aren’t looking to sell in volumn , their future plans have changed . With styling , engineering , content etc. you won’t find in a Buick , it will be specific to the “New Cadillac ” . The times are changing where you arent going to pull into a McDonalds and see Cadillacs in line for a big mac . Maybe a Buick , but not Cadillac . Those times are over . Cadillac has vehicles in the pipeline that will be more content rich than any other GM brand . And again this all takes time . They are setting the stage for a resurgence and if the right people are on the team they can do this . JMO
Just a side note ; I’m not dissin’ people who like Big Macs , or McDonalds . Although i do not eat there I know alot of people do so ther ya go . Have to be politically correct these days . =)
It is ok they killing the Big Mac too. Times have changed and it will be phased out in the next year.
No need to be politically correct when you tell the truth even if some folks can’t handle the truth. LOL!
By the way this is the best GM photo I have seen of the coupe. It really shows the lines and look of the car. I hope GM can continue to do better work with their photography as todays cars are difficult to photo and get the full impact of their styling.
In the 50s, people would buy a Cadillac told others “I have money and I am powerful” and this is what most people with lots of money has attraction, noted for something unique that others are difficult to buy
Currently this message is sent by the German car, and it is precisely this that Cadillac has to recover.
And if Cadillac continues making their cars in this way; that message will reach
it’s as simple as that, for some reason it is called sector “luxury” for many people is rooted precisely in luxury “highlights”
Regards from Spain