General Motors Company has high expectations for its Cadillac luxury division. During a recent presentation to investment bankers and analysts at the Deutsche Bank Automotive Conference, GM revealed that it expects a two-fold increase in sales volume and profits associated with its luxury Cadillac brand over the next four years.
The findings were first uncovered in a recent report from Cadillac enthusiast site Cadillac Society.
Current Momentum
Over the past three years, Cadillac has managed to increase its global sales volume by 35 percent. Though impressive, the results serve as a catalyst for even more impactful and significant growth.
Volume Growth
General Motors estimates that global Cadillac sales volume will increase 100 percent by 2021. During the Deutsche Bank presentation, GM executive vice president and CFO Chuck Stevens stated the growth in Cadillac sales volume will take place in both North American and in China. The expansion will be driven by the upcoming Cadillac CT5 sedan, the recently-unveiled Cadillac XT4 crossover, and an all-new large three-row crossover that will likely be called Cadillac XT6.
Cadillac’s product offensive entails the launch of on new vehicle every six months through 2021. Once all is said and done, GM’s luxury brand will have introduced five vehicle lines. The push starts with the 2019 Cadillac XT, which will launch in the fall of 2018 in the United States and at the end of August in China. It will serve as the first step in the product push. It is expected to be followed by the 2020 Cadillac CT5 sedan that will replace the ATS and CTS lines.
Profit Growth
Furthermore, Stevens stated that GM expects the two-fold increase in Cadillac sales volume to deliver a 100 percent increase in Cadillac profit by 2021.
We should note that General Motors has not provided actual dollar figures associated with Cadillac’s current or forecasted earnings, but the firm has previously announced plans to break out the automaker’s fiscal performance in the future.
Comments
A bit optimistic, ain’t they?
Why optimistic? I think realistic.
The XT4, XT6 and CT6 should single-handedly double the volume just based on their entry and subsequent existence and sales in these new segments.
The other models (CT4, new Escalade) should be gravy on top of that…. and after that, we should get the sub XT4 model, above XT6 model, and production Escala… which should grease that gravy train even more.
Pessimism is the go to when its concerning an American brand every time.. all the time.Sometimes its the same people who absolutely dogged Buick in 2009 for being the remaining “middle brand,” yet it is currently one of the most successful singular brands on the market globally.
Anyway I agree with U Alex. I believe that GM is actually low balling their numbers. The addition of more CUVs, EVs, a new Escalade and CT5 and 3.. there is little reason why sales shouldn’t double outside of extreme calamity. And that’s with GM sorry excuse for marketing of this storied brand. Imagine what sales would be if people actually knu that Cadillac was ever nit a great as the German brands and Lexus
All good points.
I think we’ll get to see the marketing turn up significantly once they have new product to market – including the XT4, CT6, and CT5.
That shouldn’t be difficult, or even that high of a bar to set, considering the state of Cadillac today. But I would like to remind them that that kind of thinking–volume and profits over substance–is what got them here in the first place.
I don’t know if this is something new, but if it is then Mark Reuss and Barra–two constants in GM’s ineptitude over the least decade plus–need to step away and GM needs to find another executive to head up Cadillac.
Mark seems to exude confidence and Barra seems a capable enough executive, but neither of them have proven capable of sculpting anything resembling a truly desirable brand, or making GM a leader in anything of any consequence.
There are simply too many bunts, too many base hits, and very, very few home runs.
I can see it now: more vehicles like the fabulously average last two XT_s, more resources, more products that don’t live up to their advertising, more growth in China (like that’s really hard), a few conquests from the lower-hanging luxury marques, but, all and all, another lost decade and more wait ’til _____ comes out. Or worse, we could have ourselves another as China goes, so goes _____ of America type situation like we have with Buick today.
I guess we’ll see. Maybe the faithful will get to see the Promised Land. But I wouldn’t bet on it.
Great comment.
I think the big Cadillac renaissance is shaping up to be a dud. Despite the “product onslaught”, I’m not seeing much that’s interesting on the horizon and nothing game changing.
XT4 is a massively average to below average disappointment. Another Lamba-based FWD crossover from GM and designed by the same folks that got excited over XT4 isn’t going to set the world on fire either. CT5 is the only product that might be good but even if it is, folks don’t buy sedans much anymore and why would anyone pay an M-B price for a Cadillac unless it a stunning, world-changing product which CT5 will probably fall short of being.
Cadillac might sell more cars but it’ll be at the expense of brand image if those additional cars are just another iteration of re-bodied Chevrolet crossovers.
Thanks Ci2Eye for reading my late night ramblings. I’ve agreed with the vast majority of your car posts for a long, long time and always enjoy reading your thoughts. I feel the same about what you just wrote.
Good luck.
I don’t mean that in any bad way towards Cadillac – they make some really outstanding vehicles. But, for whatever reason, people still don’t seem to recognize that (aside from on the CUV/SUV side). Then again, people simply don’t buy cars anymore at all, so that doesn’t help. There still seem to be some interior issues here and there that pull people away from full immersion into luxury, which does not help matters, but as far as the cars go, they have some of the best platforms on the market (Alpha, Omega).
There is still more than enough demand for sedans. They are not as profitable like they use to due to more CUVs and trucks being bought by consumers w/ higher asking prices.
Good thing no one can steal that graph
Oh they can definitely steal it… but at least they’ll know where it came from.
The shenanigans of web publishing…
With the increase of new SUV ans CUV models this is a very possible goal.
Now if they had planned to do it just on cars alone……
Low volume brand with high profit models.
Now Chevy saying the same thing on high volume models at lower profits would be more difficult.
If I sold 2 vehicles last year and made $4.00, I can increase that 100% next year by selling 4 vehicles and making $8.00. Can’t hardly wait to see all those Cadillacs on the road.
To be fair, Cadillac already outsells the following luxury brands globally: Infiniti, Acura, Lexus, Volvo (depending on how you count some markets), Jaguar, Genesis, Maserati, Alfa Romeo. So it’s not like we’re talking about chump change here… and that’s with very limited market presence outside North America and China.
The only brands outselling Cadillac globally right now are the three established German marques – BMW, Mercedes, and Audi. Those outsell Cadillac primarily due to two factors:
1) significantly larger vehicle portfolios
2) significantly greater market reach
GM and Cadillac are working to address both of those, and will address item #1 in the short term, and then item #2 in the medium term.
Bottom line is that GM is in this to win… because it is the single biggest short/medium term opportunity it has to significantly increase profit and boost share price, which the executive team is all about nowadays.
Yes, but in order to compete with the Big 3 Germans if that is their main focus, Cadillac will need some compelling products and a better than competitive price in order to bring in the new customers they so badly need. Hyundai/Genesis at this point is getting better reviews from major automotive publications with their luxury cars than Cadillac.
If you look across the BMW, MB lineups, the sedans and SUV/CUV’s, (save for entry models) are exciting, powerful, rear wheel drive biased platforms. The interiors are wonderful places to spend time in. So good in fact that none of the Germans get knocked for using vinyl as their base seating materials. The entry cars can take on Buick in pricing and consistently outshine Buick in every aspect.
Cadillac had a major opportunity to knock it out of the park with the XT4, but instead we got another bland lifted Malibu with Cadillac angles and crest. The XT4 with its gray plastic cladding that is barely acceptable on an Equinox, and should be nothing short of punishable on the Cadillac. It is boring for this class. Why no SUV on Alpha to compete with X3 and GLC? It could have been fantastic. Even Lincoln has stepped up to deliver a better product to compete here.
I want Cadillac and GM products in general to be wildly successful, but their latest offerings across the entire portfolio have been so safe and complacent. CT5, the next Escalade, CT6, and hopefully the Escala, better bring it or I think Cadillac gets used to being a mid tier pseudo luxury choice like Infiniti and Genesis.
I agree that Cadillac crossovers should have been on rear-drive chassis and have been a proponent of this notion for the last decade, if not more… ever since the second-gen SRX became a nicer Equinox.
Unfortunately, neither Alpha nor Omega support crossovers… so they are stuck with using front-drive platforms. Whether or not they would have used Alpha (for XT4 or XT5) or Omega (for XT6 or XT7) if those architectures could support crossovers is another question. I personally do not know.
Now, GM is working on the VSS-R vehicle set that will supposedly underpin all rear-drive car models. It’s currently unclear whether it will also be able to support crossovers. But I sure as heck hope so.
Isn’t GM an automaker. Is this even an excuse that an automaker doesn’t have a platform for an automobile. Isn’t that what they are supposed to do. GM makes up excuses on why they fail, now they make up excuses on why they cant make them. Just an opinion.
I’m not any kind of platform design engineer, but somehow someway GM was able to utilize the Sigma platform for the CTS, STS, and SRX. The Alpha being its successor and all, you’d think they could work some magic seeing as how it can be stretched, widened, shortened or narrowed depending on the body type that sits on it.
The original SRX was a bit plain-jane, but was still a very fun SUV to drive, especially with the V8 and AWD. Also the CTS, STS, and SRX were within inches or less of each other when it came to dimensions. A modern iteration would be what the doctor ordered in my consumer oriented opinion.
No matter what we consumers/enthusiasts/journalists may understand, brainstorm or arm chair quarterback when it comes to our favorite manufacturers, I wholeheartedly agree with you Alex that Caddy’s next major rear drive platform better be able to support SUV’s.
If former Cadillac President Johan de Nysschen was dead.. he would be rolling in his grave because JDN said his vision for Cadillac was an exclusive vehicle and didn’t want the street littered with Cadillac to look like a Cadillac show room.
What you are referring to is a mis-quote.
What JdN did say was that he doesn’t want to sell (give away) Cadillacs at no profit for the sake of increasing volume figures. That, however, was mis-interpreted as if he didn’t want to sell cars… and it was all down hill from there.
Notably, the strategy outlined in the article was formulated roughly a year before JdN’s departure.
A look at the sales numbers from inception to demise for the ATS/CTS sedan shows how badly corporate can predict the market, if the replacement model CT5 is not a much better riding more spacious and reliable sedan [ no CUE/rear seals etc issues] and not good early reviews they will not succeed. The true sport sedan market alone will not support big sales numbers for Cadillac. JMO
The issue with the ATS and the CTS was never their ride or space. Both were fine for their segment.
The true issue was very little national (tier 1) marketing with almost zero effort to conquest at the retail (tier 3) level. Meanwhile, Audi:
1. Markets strongly at the national level
2. Buy a bunch of customer/purchase information/data on BMW and Mercedes buyers, processes it corporately, and feeds it to dealers in the form of leads to conquest those customers (and it works); Lexus does much of the same.
Cadillac must significantly change (improve and increase) its marketing efforts while also offer the proper product. The latter is coming… not so sure about the former.
The reality is the vast majority of initial leasers/buyers of ATSs did not come back a second time and many dumped their leases early due to dissatisfaction with those issues, bear in mind dealer lots were flooded with entry level ATSs pushing the product hard the first few years. Notice the German brand dealers rarely have a base model on their lots even the least expensive models are high optioned. JMO
We are one of that vast majority. 2014 ATS 2.0T AWD junk. Can’t figure out how to shift, rough, binding AWD, leaking rear end, delaminated CUE, hit a heave in the road bent one front wheel broke the other and took car out of alignment. We did not, and will not buy another ATS. By the way our last 2 cars were a 2004 CTS 3.6 140,000 miles and best car we have owned in 34 years. 2005 SRX NorthStar RWD / AWD 140,000 miles and a great car. Maybe the 2016 and newer ATS is a better car, Im not sure we don’t own a 2016 or newer. So if the XT4 and CT5 are coming out with the first wave junk but it will get better trust me, I don’t trust you any more GM, and if you are unfortunate to own one of the first junk it will not help Cadillac. We will see, but it wont be me. Base model is ok, but if people hate it they now hate your brand, and our ATS is Premium Performance not base.
That’s not quite right.
ATS has three major issues:
Rear seat room. Less than competitors with same exterior dimensions and wheelbase.
Trunk space. Same problem as rear seat space. This is a packaging failure.
Dashboard and CUE. The capacitive touch controls are an abomination and CUE is stupid beyond belief. Why would a driver want touch screen controls to move around as their hand approaches, all while they’re trying to watch the freakin’ road?
It’s like they designed CUE in an office and never thought ahead to how it would work in a driving environment, like for a car.
Seriously, my ATS has one of the worst control interface of any car I’ve ever owned. I get into my friends 2016 Chevy Volt and the design is incredible, it’s just really well done and strikes the perfect balance between physical buttons and touchscreen controls. The touchscreen hierarchy is logical and icons never move around until touched. A real joy to use while driving.
Contrast it with my ATS, in which I often pull off the road to use CUE.
That’s why the ATS didn’t do well. Packaging and control design. The instrument cluster is silly, too, but if all else was well then buyers would forgive chintzy gauges.
The ride? If I wanted a luxobarge then I’d have bought a damn Buick. I bought an ATS because I want a sports car. I’d have bought a Camaro, but don’t want RWD for MI winters, and I don’t care for the Camaro’s cheesy styling. A V6 ATS4 coupe is basically an all season Camaro with great (exterior) styling.
The idea is placement.
A Cadillac should not be a vehicle for just anyone.
Placement with people that bring it image and status.
Today many products are now being pu5 into hands of internet stars, sports figures and power brokers.
Cadillac I’d famed for Warren Buffet in an old model like we see at Walmart.
They did have a good thing going with Tiger but the tree got in the way.
You want these car seen in the proper places not trailer parks and Taco Bell.
The cars need to be limited to a point but the SUV and CUzv models can carry volume with less image issues.
The market sustains the German sports sedan makers, but they’ve been focusing more on comfort as the state of US roads deteriorates. Looks like infrastructure spending is dead unless the political landscape changes dramatically. Fact is, Americans would rather pay lower taxes and buy bigger SUVs than have nice roads. It seems like there would be a tipping point at which they would grow intolerant of bad roads but if so we haven’t yet reached it.
Of course there is absolutely no reason whatsoever that a new Alpha-based sports sedan cannot include both sport and luxury subtypes with different springs and dampers. Even better, they could offer MRC on every drivetrain as an option, and calibrate it to truely offer both sport and comfort settings.
I’m still miffed at how Cadillac can’t offer MRC with AWD. BMW includes it on X Drive models, and they even offer X Drive on the equivalent of V-Sport models. Cadillac apparently believe that those who live in the snow belt don’t want sports sedans. To offer neither AWD on V6TTs nor MRC on AWD is like leaving money on the table. Customers would buy those options but Cadillac doesn’t want their money???
I hope there’s some new market messaging to support this planned resurgence.
I don’t know about everyone else, but Cadillac messages have really been mixed the past decade.
For instance, BMW has been the king of luxury performance and has become a luxury status symbol
Alfa is grabbing some performance enthusiasts riding on Ferrari coat tails
Porsche is the performance status symbol that charges a premium for it
Audi’s play is slick (albeit conservative) styling, AWD everywhere and value
MB largely has a bulletproof reputation & does a great job competing across the entire spectrum of luxury/performance
Lexus is all about reliability and luxury feel
So rather than provide an opinion, what will Cadillac actually differentiate on? After all the previous failed marketing campaigns, I would hope someone is thinking about this at an actual product level (rather than message of the day level).
The only mistake, I think, Cadillac is making is downsizing the CTS, or replacing it with the CT5 which is smaller. The current generation CTS is the perfect size. Its approximately the same size as the BMW 5 Series and E-Class Mercedes. All Cadillac needs to do is upgrade the interior. The rest of the car is beautiful. In my opinion, its classier looking than the BMW 5 Series, Mercedes E-Class and Audi A6 and several thousand dollars less expensive. The only problem has been the quality of the interior and advertising. The problem with the advertising is both the quantity and quality. There are very few ads and the one I seen pretty much SUCK !!!
Frank Ricciardi,
I agree. CTS, like CT6, is a very attractive looking car and has a unique look that honors its heritage while also being thoroughly modern. The issue holding it back, holding both CT cars back, is interior and engine. They both have great proportions, excellent lightweight body structures that break ground with regard to how they are constructed but buyers don’t see that or fall in love with a cars’ structure.
In the area of what consumers see, touch and hear though, they have substantial shortcomings. Advertising has also been poor. Interestingly though, Cadillac just redid the exterior of the CT6 while leaving the interior intact. Obviously GM saw the exterior design, rather than the interior as an area in need of improvement.
Reliability issues , poor resale values ,,,,, grace the world with more crisp angles and corners , good luck with ambitious plans . Perhaps have Barra drop in occasionally to the New York office for coffee or tea and a chat !
Get the steering wheel on the other side and sell to the UK.
Potentially big opportunities for growth in the next few years.
Sick of the sight of German cars here!
1/7 cars made in Germany is sold in the UK.
Increasing sales and profits seems doable.
Doubling, though … sorta seems that, between price pressures from steel and aluminum price increases, and margins in China not being as generous as they are in the US – along with SAIC keeping half of the proceeds…
… doubling (net) profits will be a challenge.
Good looking vehicles, but always rated near the bottom in reliability.
If Cadillac really wants to up its game, they should build some dedicated dealers. Sharing dealers with Chevrolet doesn’t cut it.