Cadillac dealers treading water until de Nysschen's vision materializes (Now cutting 43% of dealers)

[CIF]

I understand your comments on the glacial styling pace (and, to some extent, agree with them). But, on the other hand, sometimes when Cadillac HAS tried something radically different from their norm, they got into hot water. The 1980 Seville was a classic example....it was panned from the start.

Yes also a good point, but it's all about balancing expectations. Keeping most of your existing customers happy, while attracting new customers. One extreme is constantly changing styling. The other extreme however is keeping styling virtually unchanged for a decade, or decades even. Neither extreme is a good strategy.

 

[Bulldog 1]

Here is a REAL PERSPECTIVE on why Cadillac is failing, not some drivel from someone who has never owned one (read my first post, I have owned eight Lexus cars and one Cadillac CTS).
Reviewing today's local newspaper car ad, we find....ONE PAY 24 month lease on a Cadillac ATS Coupe 2.0T $12,291. ONE PAY 24 month lease on a Cadillac CTS 2.0T $12,047.
What customer thinks that a 2 door ATS is worth more than a full-sized CTS sedan? And would you really pay $550 a month (figuring in my local sales tax) plus tag, and fees for this car?
Turning to today's Cars.Com cover page feature vehicle, a long write up on the upcoming 2016 Cadillac CTS-V with over 640HP. And a starting MSRP of $85,600. Price as tested by the writer: $95,780 because he added Recaro seats (+$2,000) and the Carbon Fiber package (+$5,000).
There is no one that I am aware of personally or remotely that would consider paying nearly $100,000 for a Cadillac CTS-V with a V-8. Oh, and that price included the Gas Guzzler tax. Jesus, a Z-28 Camaro and a Corvette ZR-1 from Chevrolet manage to produce pants wetting torque and horsepower out of a V-8 engine with NO gas guzzler tax.
There are serious issues at play here, and with this kind of advertised pricing as well as producing a halo car that nearly nobody will buy, do you still question why this division is in trouble? SMH

 

[Gecko]

Cadillac Plans New Model Blitz, Separate Financial Reports To GM

Since taking over the reins at Cadillac two years ago, Audi veteran Johan de Nysschen has set about distinguishing the brand from its General Motors Company [NYSE:GM] parent by moving its headquarters to Manhattan, turning it into a separate business unit and convincing its dealers to avoid dropping prices simply to move metal.

In the future, de Nysschen hopes to have an even higher level of autonomy and be able to deliver separate financial reports, similar to how his former employer Audi works within the Volkswagen Group. According to him, separate profit or loss statements could come from Cadillac as early as 2017.

His latest comments were made during yesterday’s J.P. Morgan industry conference, where, the Detroit Free Press reports, de Nysschen confirmed plans for a new model blitz that would include five crossover SUVs by the end of the decade. In addition to these high-riding models, there will also be a new subcompact car and three additional models that straddle the line between compact and mid-size cars.

Some of the new models we can confirm are a compact crossover to be built in GM’s Orion plant in Michigan, the SRX-replacing CT5, and a large crossover with third-row seats. The three models straddling the gap between compact and mid-size cars are likely to be the replacement for the ATS range. These will be in addition to previously confirmed models like the upcoming CT6, a replacement for the ELR and two new range-topping models including a true flagship sedan and possibly a coupe or sports car.

During the conference, de Nysschen also confirmed a sales target of 500,000 vehicles by 2020, or about 5 percent of the global luxury vehicle market. Last year Cadillac sold 263,697 vehicles, good for about 3.4 percent of the market, and this year the brand expects to sell approximately 300,000 vehicles.

But simply increasing sales isn’t the main goal, as de Nysschen also wants dealers to be more disciplined when it comes to reducing prices. He also wants to see an improvement in customer experience at dealerships. Previously, he said he wanted to see some smaller Cadillac dealerships—those shared with other GM brands—turned into ‘boutique’ locations that better show off the Cadillac brand and give customers a more upscale experience.

Source: http://www.motorauthority.com/news/...-model-blitz-separate-financial-reports-to-gm

 

[mmcartalk]

Good post, Gecko.

Some of the new models we can confirm are a compact crossover to be built in GM’s Orion plant in Michigan,

That one, of course, has been known for awhile...the one that will compete with the MKC/NX/Q3. It is expected some time late next year or early 2017. I'm still looking forward to it, though....should be an interesting newcomer.

there will also be a new subcompact car

And you can bet the monthly rent that if they go forward with it, they are going to do a much better job on a subcompact car this time. Even 30 years later, bad memories of their last subcompact, ill-fated Cimarron and its laughing-stock experience haunt the division..........so much so that rumor has it (I can't confirm it either way) that Cadillac execs and managers have to keep pictures of the Cimarron on their office walls to remind them to never do anything like that again.

Just as an aside comment, though, these seem like pretty ambitious plans for the division (and I certainly agree with at least some of them). But this is going to cost a lot of money if it is carried out, and it seems a little unclear just how and where all that money is going to come from...besides the projects already funded and in progress, like the new MKC-fighter.

 

[IS-SV]

Agreed the separate division is a big expensive step that would force GM to disclose far more financial information than they might be comfortable with. And the final decision to do this can only made by senior execs above him, including CFO.

Given it's stated more as a hope, "In the future, de Nysschen hopes to have an even higher level of autonomy and be able to deliver separate financial reports, similar to how his former employer Audi works within the Volkswagen Group," I was a bit surprised it was even mentioned at this early stage, but they could always back down later and said the "Caddy division financials" are for internal use only and not show any of it to public, more of improved management reporting.

 

[mikeavelli]

I read a comment I think on AutoNews that still is the key. Its the product stupid! Until the buying public truly considers Cadillac the "Standard of the World" (I think that was an old slogan) because the cars arguably are, then all the name changing and separating means nothing. And to me the CT6 is not at all a ground breaking car that says "we have arrived". Rather is says "we are super late to the party and here because everyone else is".

They have that type of car in the Escalade and CTS-V. They have to replicate that formula with NO mistakes. The market is just too unforgiving right now.

 

[mmcartalk]

I read a comment I think on AutoNews that still is the key. Its the product stupid! Until the buying public truly considers Cadillac the "Standard of the World" (I think that was an old slogan)

Yes, that was the old slogan. (I grew up with the old Cadillacs carrying that slogan). But, even then, IMO, among luxury cars, they weren't necessarily the world's standard. They had a lot of bling, were as long as barges, rode comfortably, and had good detail in their interiors, but were still outclassed by the competition in some ways. The Chrysler Imperial had better handling, fewer rattles from its unibody structure, and a more durable drivetrain. The Lincoln Continental had a better paint job, truly astounding ride comfort, and (for the period) award-winning styling. And the AMC Ambassador gave almost as much car at a much lower price.

They have that type of car in the Escalade and CTS-V. They have to replicate that formula with NO mistakes. The market is just too unforgiving right now.[/QUOTE]

They may have that type of car in the CTS-V, but how many Vs are actually selling? Seems like many of their potential customers are getting Ms or AMGs instead, especially here in the D.C. area.

 

[IS-SV]

Note: I was recently in Monterey/Carmel area during the car week and saw more Caddy's and Lincoln's than usual, every one was a rental car which came as no surprise. Very popular rental car was new Mustang convertible, therefore Hertz tries to move as much of its Mustang convertible inventory (from other areas and out of state) to that location for that week. Mercedes's provided cars this for the main concours event at Pebble Beach, saw some new of CLS 400's provided.

 

[mmcartalk]

Note: I was recently in Monterey/Carmel area during the car week and saw more Caddy's and Lincoln's than usual, every one was a rental car which came as no surprise. Very popular rental car was new Mustang convertible, therefore Hertz tries to move as much of its Mustang convertible inventory (from other areas and out of state) to that location for that week. Mercedes's provided cars this for the main concours event at Pebble Beach, saw some new of CLS 400's provided.

Just out of curiosity, how much do they charge to get into that Pebble-Beach show......or is it only by special-invitation? The average big-city new-car auto show is usually between $10-15 for tickets, though I almost always get multiple free passes for the D.C. show.

 

[IS-SV]

Just out of curiosity, how much do they charge to get into that Pebble-Beach show......or is it only by special-invitation? The average big-city new-car auto show is usually between $10-15 for tickets, though I almost always get multiple free passes for the D.C. show.

About $300+, raises lots of money for charity so nobody complains. I did not attend in 2015, although sometimes I get access to free tickets and their corporate suite area. I rarely attend PB because there are so many other events in "car week", I try to attend one day every year. PB is on Sunday so it's more of a hassle.

I attended " Concours on the Avenue" Tuesday in Carmel, it's free and just a casual concours. The hardware even in this low key event (hosted by Acura in 2015) is amazing. For example, authentic 289 and 427 Cobras and Shelby 350's are plentiful, not to mention far more rare and valuable cars. I'll pop in a few pics for fun. The non-event cars parked on the curb during car week are unbelievable. Oysters and clam chowder lunch was yummy too.

Regular big city car shows like DC and SF are a very different conversation, therefore the tickets are given out like penny candy by dealership people at no cost to them. I usually get free tickets to SF and SJ shows as expected.

Regarding Caddy, plenty of Caddy rentals rolling around area...

 

[mmcartalk]

$300 is more than I expected, but not surprising considering the show's prestige location and those who attend it....and if the money goes for charity, it may be tax-deductible. We have an AC Cobra club here, too, that meets on Saturday mornings.....I often gas up with some of them at my local Shell station.

The D.C. show is somewhat different from other big-city shows in that it is dealer-sponsored (WANADA), not manufacturer-sponsored.

You say you saw some Caddys and Lincolns there. Did they show off the XT5 (the SRX replacement)? Per the thread-topic, that is going to be a very important new model for Cadillac....but probably not as important as the new compact CUV next year or in 2017.

 

[IS-SV]

Not aware of Caddy or Lincoln showing new cars during car week.

Acura did a nice job hosted Carmel event Tuesday, and showing NSX.

 

[CIF]

Good luck to Johan de Nysschen. Trying to change the corporate culture at GM and Cadillac, a monumental task.

 

[mmcartalk]

Good luck to Johan de Nysschen. Trying to change the corporate culture at GM and Cadillac, a monumental task.

Sometimes that's true, but a lot of it WAS changed during the GM buyout/reorganization of 2008-2009. It opened up Cadillac to some new (read: "younger") customers, but also cost them some of their former loyal ones......in the age group that traditionally has the most money to spend on new cars, around and just before retirement.

 

[CIF]

Sometimes that's true, but a lot of it WAS changed during the GM buyout/reorganization of 2008-2009. It opened up Cadillac to some new (read: "younger") customers, but also cost them some of their former loyal ones......in the age group that traditionally has the most money to spend on new cars, around and just before retirement.

They haven't strongly captured the younger crowd, but they've managed to alienate a lot of their older buyers by cancelling some well-loved older models.

 

[mmcartalk]

they've managed to alienate a lot of their older buyers by cancelling some well-loved older models.

+1.
Yep...you've certainly got that right. Buick and Lincoln did exactly the same thing, and lost a part of their traditional crowd as well. But the difference is that with the exception of the slow-selling Regal, Buick was able to introduce some successful new models to take their place, where Lincoln, to date, except for the MKC, has not. We'll see show the new MDX does.

Some analysts claim that the older buyers who kept DTS, Lucerne, and Town Car sales going no longer matter, that they are all dying away or not driving any more. I disagree. Typically, those just before retirement (late 50s-mid-60s) have the highest incomes and the most money to spend on a new car, as they have been working (and hopefully saving) much of their lives, and have put a lot of money into accounts. If automakers can appeal to them, they stand to earn some good profits.

 

[mmcartalk]

Agreed the separate division is a big expensive step that would force GM to disclose far more financial information than they might be comfortable with. And the final decision to do this can only made by senior execs above him, including CFO.

How much financial information is actually released, though, is not simply up to managers or execs. Because GM publicly sells stock, SEC and other Federal rules specifically dictate how, and how much, info has to be released for the benefit of investors. And, ever since the 2008-2009 bailout, GM's numbers have been watched like hawks. Some execs in the auto industry have had to resign, and in some cases even prosecuted, for trying to cook figures.

 

[CIF]

+1.
Yep...you've certainly got that right. Buick and Lincoln did exactly the same thing, and lost a part of their traditional crowd as well. But the difference is that with the exception of the slow-selling Regal, Buick was able to introduce some successful new models to take their place, where Lincoln, to date, except for the MKC, has not. We'll see show the new MDX does.

Some analysts claim that the older buyers who kept DTS, Lucerne, and Town Car sales going no longer matter, that they are all dying away or not driving any more. I disagree. Typically, those just before retirement (late 50s-mid-60s) have the highest incomes and the most money to spend on a new car, as they have been working (and hopefully saving) much of their lives, and have put a lot of money into accounts. If automakers can appeal to them, they stand to earn some good profits.

Not to mention all the overwhelming evidence and data that shows the younger generation (primarily in North America) is less interested in owning a vehicle, as well as having less disposable income (compared to previous young generations) to actually buy a vehicle.

 

[IS-SV]

How much financial information is actually released, though, is not simply up to managers or execs. Because GM publicly sells stock, SEC and other Federal rules specifically dictate how, and how much, info has to be released for the benefit of investors. And, ever since the 2008-2009 bailout, GM's numbers have been watched like hawks. Some execs in the auto industry have had to resign, and in some cases even prosecuted, for trying to cook figures.

Not the case with "division-level" disclsure of financials, GM senior execs can determine that level of reporting. But once that level of reporting has started, expectations for future periods will be established. Senior execs/CFO can work this through senior members of their external audit firm to outline such changes, not that decisions like that are taken lightly. Some of us here have actual experience with SEC reporting btw, not relying on usual internet hearsay and assumptions.

GM Bailout today/Feds out of that picture now, not applicable.

We are not talking about cooking books and breaking laws, not applicable.

 

[CIF]

Valid points all around.