Andrew Palmer, who’s overseen Aston Martin as its CEO since 2014, painted a harsh reality for luxury brands nestled within mass-market automakers.
Speaking to attendees at the Automotive News World Congress, Palmer said he’s skeptical that Cadillac, in particular, can break through at General Motors. Palmer previously worked for Nissan.
He said there’s a major disadvantage to luxury brands bundled within major OEs and said, “Basically, Cadillac inside of GM, Lincoln inside of Ford or Infiniti inside of Nissan—none of them will make it.”
Palmer made the comments as he touted how Aston Martin’s independence from a major automaker (Aston Martin was formerly a part of Ford) has helped it flourish in recent years. He named the company he oversees as one of six elite and true luxury brands alongside Ferrari, Lamborghini, Bentley, McLaren, and Rolls-Royce.
He added a prediction that in the next 10 years, the industry won’t see any of the lower echelon brands break through into the elite space, taking aim at Cadillac, Lincoln and the like.
His sentiment makes some sense. Palmer explained that brands such as Cadillac, Acura or Infiniti are tied to sales volumes and a drive for profitability within the parent automaker. And in the pursuit of sales figures, incentives can undermine the experience. According to Autodata, Cadillac’s average incentives were $8,900 on a vehicle. BMW and Mercedes-Benz trailed the figure with an average of $5,750 worth of incentives on a new vehicle.
Stephanie Brinley, IHS Markit principal analyst, echoed Palmer’s words and used the 2020 Cadillac XT6 as a prime example. She said such a vehicle shouldn’t have been greeted to the lackluster response it received. The XT6 rides on an established platform within GM, yet isn’t packed with much technology compared to rivals. Cadillac is supposed to be GM’s lead technology brand. The weak comparisons to the Lincoln Aviator luxury SUV were almost instant upon its reveal.
GM President Mark Reuss, who has oversight over Cadillac, took the fall and made no excuses as to why Super Cruise isn’t part of the XT6, one of Cadillac’s technology masterpieces found only in the CT6 sedan. At the same time, he said Cadillac’s push to lead GM into the electric-car space is the brand’s last chance at true success.
Comments
Not all the way 100% accurate. Lamborghini, Bentley are no more than tarted up VW well at least the SUVs.
Not all the way 100% accurate, agreed. Let’s start with the “Aston is now flourishing” bit. Their IPO tanked, badly, gaining far less than predictions and making Palmer trot out the excuse list. Which now has extended to attacks on others. Hey Palmer, Ghosn fired you to give your job to De Nysschen, and then JDN left that for Caddy, a job you also wanted badly, and now he’s going to rebuild Opel for Tavares at Pug, yet again another job Palmer wanted. Why didn’t Palmer get those jobs? Look at the failed Aston IPO…
They’re trying to brand apartment buildings. Not the best sign of health for AM.
True, and Audi and Porsche are also owned by VW. Others have also mentioned Rolls-Royce being owned by BMW.
However, all of those brands were independent in living memory, and were just acquired by the larger conglomerate, who have mostly (and wisely) left them alone. The earliest was Audi by VW in the 1960s, and Palmer doesn’t mention them as a “true” luxury brand anyway.
Cadillac was acquired by GM in 1909, so they’ve been part of GM basically since the beginning. That’s one of the key differences between Cadillac and the other brands. Plus, GM is ruled by cheap, good-enough, mass market thinking, and decided to move all of the designers of their expensive luxury marque to beautiful upscale Warren, MI! GM wouldn’t know luxury if it bit them on the ass, how can they be expected to build a vehicle to cater to that class of people?
Infiniti has the same problem and so does Acura. This is compounded by the fact that Infiniti’s entire lineup is 10 years old, and Acura doesn’t seem to really care about being true luxury.
Lexus is the only outlier here. They’ve broken in to the true luxury club, while being an arm of the Toyota company. Even still, it took a hugely impressive and earth-shattering introduction with the original LS400, decades of continuous product and messaging, and even today they’re still regarded as on the lower end of the true luxury club by some.
New Q,
“However, all of those brands were independent in living memory, and were just acquired by the larger conglomerate”
That’s false. Bentley and Rolls were both acquired in 1998, now 21 years ago. This is a long-time in the auto industry. And the parent company is very active in both brands with virtually all their components sourced from the mother ship.
I mean to say they were independent of the larger firm for the majority of their lives, with the possible exception of Audi.
Rolls-Royce was independent (or at least not meaningfully answering to another more mass-market corporate entity) for 92 years before it was bought by BMW.
Even Audi, which is going on 50 years of VW ownership, existed independently recently enough that people alive today can at least remember it.
Not a lot of people were around before 1909 to remember independent Cadillac. They’ve been under the thumb of GM for the VAST majority of their life.
All of this is just trying to speculate a cause for the symptom however. Which is, GM’s practices and ways of thinking short-change and cripple Cadillac. If that weren’t the case, we wouldn’t even be having this discussion about historical ownership.
And yet BMW owns Rolls Royce, and even a closer comparison, Volkswagen Group owns Bentley and Audi (who is owned by VG) owns Lamborghini. And, Volkswagen group just
announced that Bentley needs to start making a profit. So three of the brands he mention, are owned by “Parent” companies, although BMW is on a higher tier than say, Chevrolet-obviuosly.
Having said that, GM really is nickel and dime-ing Cadillac to the graveyard.
Yeap! You are correct!
Aston independent? What a laugh! If Merc dumps their contract, they will have to put a caterham-engineered Ford Pinto 4 in there…
Notice that they make zero mention of the Lexus…
Maybe because Lexus is selling more units than the others, (even with hideous designs IMO) and has a superior reputation-real or imagined in the minds of those that purchase their products?
Or, he forgot about them!
No one cares about Lexus/ tarted up Toyota.
That’s because Lexus is well-insulated by Toyotas’ cash.
If luxury brands within automakers are doomed as Palmer suggests, then Lexus would be the last to go.
Luxury brands have been fueled by cheap interest rates and consequently cheap leases. Those days are gone now.
I disagree with the premise. Rolls Royce is doing quite well under BMW although the Bavarian carmaker is a premium carmaker itself. Still, BMW has demonstrated how to be a good steward of a storied marque like Rolls Royce. The image of the old English carmaker was diametrically opposed to that of BMW and BMW wisely never sought to change that or remake it. They knew that although they’d had great success building The Ultimate Driving Machine, that wasn’t the Rolls Royce persona so when the 2003 Rolls Royce Phantom was unveiled it was every inch and every ounce a Rolls; not a gussied-up BMW in any way. It actually didn’t handle exceptionally and that was okay. That was as it should be. It was true to its own heritage and history. The funny thing is, it sells. BMW has proven that there is more than one way to successfully build a luxury car. There is the sporty autobahn-charging namesake brand and the grandly scaled, silent-motoring character of their British marque. Both automotive personalities find buyers.
Cadillac doesn’t succeed for many reasons but in large part because they have an identity crisis. They are known for creating a certain kind of automobile which was their mainstay for 100 years but of late they’ve been trying to reinvent themselves under an entirely different image, essentially a copycat BMW image. It hasn’t worked and it won’t work. They aren’t being true to themselves. It is doubtful their latest scheme to morph themselves into a Tesla clone will work either.
Cadillac could successfully exist within GM if the corporation would treat it more like BMW treats Rolls Royce by letting it be true to its history and never forgetting that past and knowing when products are unworthy of the name. Sadly, I don’t know that GM’s leadership is capable of properly managing Cadillac in the same way the Quandt family and BMW have so far managed Rolls Royce. One merely needs to look at the Cullinan and the XT6 for proof. One is an outstanding response to the SUV craze where classic RR attributes were applied to a tall utility type product creating a genuine “high Roller” and the other is a re-bodied Traverse with little Cadillac DNA or real luxury designed to make a quick buck.
Andrew Palmer is wrong that a luxury brand must be a stand-alone brand but he is perhaps right that a true luxury brand can’t exist within GM and Nissan.
I agree with most points, but where you are wrong is in your assertion that Cadillac couldn’t compete with BMW. They did compete successfully with BMW and in many cases won. Most auto reviewers who drove the ATS and CTS felt that they were superior to the Germans.
That doesn’t mean this is the strategy they SHOULD pursue, but under JDN they did and, in some measures, succeeded. Say what you will, the alpha platform, especially ATS, is one of the best driving sports cars I’ve ever driven. So is my 6th gen Camaro. So good that, if they kept on going in that direction, I would regularly purchase from them, and there are a lot of people out there who feel the same.
I think one thing we can all agree on is that Cadillac doesn’t deserve to be just another Buick.
But does it absolutely need to be a Rolls? Not for me, at least. I was happy with the “Beat the germans at their own game” Cadillac.
Ci2eye never said Caddy couldn’t compete with BMW. He said that they are imitating BMW, trying to be an American BMW. He’s (RIGHTLY) saying that Caddy should stop throwing away their heritage and just build Caddilacs, not American BMW’s cause it’s not working out for them and it never will.
Stew,
That’s it exactly. I think everyone loves Cadillac’s recent concept cars because they prove someone at GM understands their unique heritage. The Sixteen, the Ciel, the Elmiraj, and even the Escala are all unabashedly Cadillacs. There’s no mistaking them for anything else. When I see them, I see a real 21st Century Cadillac. I don’t see an imitation BMW or a vinyl-roofed holdover from 1987 as some assume I want when I espouse Cadillac should look to their past for inspiration. Elmiraj doesn’t evoke 1987 at all. It’s thoroughly modern but every crest and badge could be stripped from it and car enthusiasts the world over would still identify it as a Cadillac. It has the design elements and the swagger of a Cadillac of old.
Agreed, I see traverse written all over the xt6, in fact it would have done well as a traverse.
Well said and spot on.
Gm has let Cadillac’s ship drift aimlessly without a true course to arrive to a desired destination.
Therefore, forming scattered and confusing lost identities that reek of,”Buyer Beware”. Consumers are either not buying Cadillacs because of past blunders, or there are just better options regarding materials, design, history, consistency and prestige.
Theoretically, even if GM had allowed Cadillac to be bespoke 10 years ago, they would still be playing catchup. But they most definitely would be in a better position than they reside now if they were to be dedicated to a consistent direction that was true, uncomprimsed luxury with no cost-cutting corners. Either swim, or get out of the pool.
Going down the toilet bowl can’t be a nice feeling!
Sad to see so much disjointed blunder, when most of us can see what needs to be fixed. And we aren’t even in the car business. I can’t believe Lincoln finally woke up and Cadillac is asleep at the wheel thanks to unbelievably poor/cost cutting leadership just to squeeze a profit only to erode the future of the brand. That game won’t last much longer.
WAKE UP, GM!
I agree about Lincoln. I actually think Ford’s premium brand is doing things right these days. They don’t have a lot to work with and they were further behind than Cadillac but the new Continental was a clarifying product for them. It set a tone for the brand that builds upon their heritage. The notion of “quiet luxury” and the design language that began with that product are a perfect marriage of their history with today in my opinion. There is much room to grow for Lincoln within the niche they are developing for themselves. They don’t appear to be chasing BMW down a canyon or looking to Silicon Valley for inspiration, they appear to have found themselves again and figured out how to parlay those classic Lincoln virtues into an SUV-crazed marketplace.
The new Aviator encapsulates every thing a Lincoln was and should be. It is elegant and stylish but a bit showy. It’s built on a RWD platform to offer a balanced driving experience and proper proportions. The interior is a very pleasant place to spend time as it is quiet, beautifully outfitted and comfortable. Every adjective there sounds like belongs in a Lincoln description whether describing today’s Aviator or something the marque built in the 1920s, 1960s or any other time when the Lincoln name epitomized American luxury.
Volkswagen built a great luxury car called the Phaeton once which nobody bought because nobody thinks of a luxury car when the word Volkswagen is uttered. It helps to play to your strengths when building cars and be true to ones own self. Lincoln is doing just that.
How come Geely got it right with Volvo? Oh that’s right because they have a smart “hands off” approach and let’s Volvo decide what to do Geely signs the check and Volvo decides what to build without the fear of bean counters cost cutting them. It’s done wonders for them maybe GM should take notes on this business model. (And Geely and Volvo still manage to use the same platforms with greatly different products. Lynk & Co. vehicles look nothing like Volvo’s).
Geely got it right because they gave Volvo full advantage of designing their vehicles. Geely only bought them and gave them financial freedom. When Ford owned them, Ford wanted control just as many other companies that buy out others
Guys, my 2 cents.
As much as my name is linked to James Bond i think the Astons are way overpriced.
Im not sure if you guys read today, Aston released a Tag Huer edition car.
It looks awesome, but I think when the next generation of Cadillac performance cars are released, they will be even more better to look at. Black rims, dark night package, a good suttle exterior color, and I think we are in business.
Cheers,
Sean
Cadillac would easily top the word’s most desirable car list today had they simply produced the Ciel and Elmiraj.
It would behoove GM to recruit Ed Welburn out of retirement to turn the division around and give him complete autonomy to run it uncompromisingly. GM has (or at least until recently had) the talent in-house to design and engineer the most elegant and refined automobiles in the world, but then as now, corporate management lacked both the vision and the commitment. There will never be an acceptable excuse for blowing all that money on the NY HQ fiasco while at the time an incomparable team in Detroit was well on its way to resurrecting the Standard of the World. Bring these people back and let them finally design and build the grand Cadillacs they were prepared to before Barra & Co. squandered Cadillac’s resources and drove it further into oblivion.
The Aviator was named best of show. So that confirms it.
I owned a brand new Cadillac Fleetwood Brougham back when Cadillac was building a true Cadillac. It was a true luxury looking, both inside and out, automobile. The problems were I was on first name basis with everyone in the service department. My next car was a Lincoln Town Car, Signature Edition. Once again, true luxury inside and out. Both had room inside and lots of comfort. Now those options are no longer available. These new designers are 4’10” and weigh 75 pounds. The seats are less inviting than a low cost airline. To jump the price up, you have to have a Sun/Moon Roof in almost everything (just what you want, a bunch of glass falling on you during a crash. Besides, who can use one of those while going 70 mph on the interstate). I have owned/leased almost every brand of GM product, plus two Mercedes Benz (E-class and the SUV), a Dodge Charger R/T Hemi, and a Nissan Maxima. I have tried to go back to Cadillac, however even GM does not want their cars back since the residual values are in the low 40%. Maybe some day, someone at GM with a little bit of class will decide to build a quality luxury automobile, offering some true comfort for those of us who do not go around curves at 90+ mph. Hey GM, all of those cars on the Interstates traveling across country really do not want to “feel the road; bumps and all. So far, I have not seen anything like that from GM; so sad.
Yeah, yeah, yeah. Wait 1-2 years when the new Caddys are out and we will talk.
Cadillacs will be great.
LMAO. Cadillac said that in the early 1990s with new STS and Elderado. They were okay. Later in 2000s with Art and Science. LOL. Then with the CTS and ATS.
How many times has said that, “Wait 1-2” and why must we keep waiting? Make it right the first time, then there is no need to wait. Why aren’t Cadillacs great now? Now they have SUVs that are nothing more than dressed up Chevys. Now that SUVs are in demand Cadillac will do what it cars from the 1970s until now. The public realized the BS Cadillac was making did not BUY them. The same will happen with its SUVs. The Xt4, 6 have received horrible reviews for their tech, engine, and cheap interiors. How’s that a winner? But that’s what we have waited for? The CT4,5 will fall behind the new 3. the e, 5, a6 will be at least 2-4 year old when the Ct5 arrives behind, I bet it won’t be any of them.
NOT ONE CADILLAC is at the top of its class!
Hey you just wait I am going to get big and kick your butt. I think I said that when I was 12 years old.
This forum doesn’t allow to post photos but I can show you some best-in-class or among best-in-class Cadillac. They’re all from about 1920s to 1950s. Can throw in 1960s, too, I guess. Classy, tasteful, and beautiful inside and out. Cadillac hasn’t made anything as stunning or eventful since, with the exception of the current Escalade. The CT6 in top trim is the best sedan since the 1960s. But that’s top trim. And even still, that interior in top trim is still a few notches below MB, BMW, Audi, and even the new Lincoln interiors. Range Rover, too.
I know Cadillacs are great handling cars now. GM engineers have stepped up their game. Camaro. Corvette. Cadillac V series cars. They compete with the best in that regard. But Cadillac as the American BMW is not working because they don’t even copycat BMW right. It’s sport luxury. Cadillac got the sport part figured out. But they haven’t got a damn clue on the luxury part yet. BMW interiors are very much superior in fit, finish, quality, and design. Start making an interior that gets people talking the way people are talking about LIncoln and maybe you guys might have a prayer. Or, go back to your roots as American luxury. Drop the sport and just focus on making quite, comfortable, luxurious floaty cars without any asterisks or apologies necessary. Don’t aim for BMW. Aim for Rolls Royce but figure out how to make it work across a product line ranging from $30k to $100k.
I do understand you, but you have not seen the cars I’ve seen. I’m talking about the upcoming Cadillac products.
And ,btw, the CT5 will be positioned as a D-segment car. It means it will go against the A4/3/C. This is not a guess.
Anyway, what do u mean by ” arrives behind”? Is it a final race or what? All cars have their own and different life cycles. The new 3 series was shown 3-4 months ago, but there are no spy pics of the upcoming C-class. So what?
However, the Ct5 and the current BMW 3 will have almost the same life cycle, because the CT5 will be shown soon. And believe me it looks much better than the BMW.
If it wasn’t for Goldfinger, Aston Martin would not be around. Never could win a race, not very luxurious, Tractor engines, I don’t pay any attention to them.
Cadillac’s problem is GM. GM Can’t build a proper luxury car even if their lives depended on it. Cadillac abandoned being Standard Of The World & settled for Good enough when GM’s beancounters kicked Harley Earl to save a buck.
Cadillac had a chance with JDN, an outsider with real experience in the field, but Noooooooooo GM just had to had it’s way & stick to their Good Enough business model. I don’t have faith in SC, He’s a GM lifer & Good Enough is the only thing GM lifers know, but I’ll give him a chance & see if he can turn the brand around … If he lasts for a full generation cycle that is. & So far I’m not impressed.
I still stand by my statement. Cadillac’s only chance is complete Independence from GM.
As for the other brands, Infiniti’s days might be numbered now that Carlos Ghoson is out of the picture. I mean let’s face it, the Q70, QX70 & QX80 are all 10 years old with no new generation in the horizon, they actually extended the life cycle of the current QX80 by 6 more years. The Q30 & QX30 are doing so bad, infiniti is on the record saying there will be no second generation of either one. The QX60 is aging. I’m not familiar with the Q50 & Q60 annual global sale numbers, but I can’t imagine they are doing that well. That leaves the new QX50, I guess we’ll have to wait & see.
Honda seems to be fine with Acura’s current situation. As long as the status quo doesn’t change for worse, Acura will tag along.
That leaves Lincoln, if the new products doesn’t translate into tangible annual global sales figures & increased profits in the next few years, they’ll be on the chopping block, Ford doesn’t have the stamina for long term plans.