Cadillac's product makeover will include five new SUVs or crossovers by the end of the decade, a new subcompact car and three redesigned models that straddle the line between compact and midsize cars, according to a presentation by brand President Johan de Nysschen to analysts in Tuesday.
But de Nysschen's message to the J.P. Morgan Auto Conference was the long-term strategy will require patience. Before long, however, Cadillac will be measured against its 2020 goals of 5% of the global luxury car market (from 3.4% today) and sales of 500,000, up from a forecast of 300,000 this year.
By the end of 2017 Cadillac will also report its profit or loss as if it were a separate company.
Globally Cadillac's sales through the first seven months of 2015 have increased 1.5%, largely due to its growth in China, but in the U.S. it is the only one of the seven main luxury brands to see sales fall. Cadillac sales through July are down 2.4% from the same period in 2014. In that same period, Lexus sales rose 13.6%, Audi's jumped 12.4%, BMW's are up 6.4%, Mercedes-Benz, up 8.1%, Infiniti gained 10.1% and Acura was up 12.8%.
In short, most of the luxury market growth is happening in the crossover segments where Cadillac has one model, the SRX.
DeNysschen has warned General Motors management, Cadillac dealers and the media that building the brand's prestige will take a combination of expanding the number of models, being more disciplined in pricing them and upgrading customers' experience in the showroom and service departments to equal or beat all competitors.
He also said dealers will be measured on how well they accomplish those last two objectives. Cadillac has 928 dealers in the U.S. who sold 165,000 vehicles last year, compared with 282 Audi dealers who sold 182,000 cars, or less than one-third as many dealers.
"The reality, particularly in the U.S. is that the quality of the Cadillac dealer network does significantly trail that of our competitors," deNysschen said.
But the average return on sales for Cadillac's dealers has improved slightly to 2.5% this year through July, up from 2.3% last year.
"It's not the best in class. It's not the worst in class," deNysschen said.
On the positive side, Cadillac is the only luxury brand to cut its incentive spending this year — by $600 per vehicles to $5,201. That's less than BMW ($6,313) and Mercedes-Benz ($5,606), but considerably more than Lexus ($4,556) and Audi ($3,170).
The average Cadillac is selling for $51,920 so far this year, second only to Mercedes at $52,702, but that reflects the strength of its Escalade SUV, which sells for between $70,000 and $90,000.
Source
USA TODAY