GM Cadillac chief outlines plan for fewer sedans, more electrics

[Tragic Bronson]

http://www.reuters.com/article/us-gm-cadillac-idUSKBN1AC36W?il=0

DETROIT (Reuters) - The head of General Motors Co's (GM.N) Cadillac luxury division said on Thursday the brand will shrink its lineup of sedans and expand its offerings of sport utility vehicles and hybrid and electric vehicles in response to market shifts.

Expanding Cadillac's global sales is central to GM's overall profit strategy, and Cadillac has reported a 27 percent increase in worldwide sales through the first half of the year.

However, in the United States, now the brand's second largest market behind China, Cadillac sales are down 1.6 percent and combined sales of the brand's four sedan models have plummeted 16.3 percent through the first half of the year.

That has forced GM to order layoffs at two Michigan factories that build Cadillac cars, and raised questions about the long term future of the plants.

"We have to rebalance our sedan portfolio," Johan de Nysschen told Reuters in interview, offering new details about the strategy.

Cadillac will not directly replace the current XTS, CTS or ATS sedans when they end their life cycles in 2019, he said. Instead, Cadillac will use a single new car called the CT5 to appeal to consumers shopping for sedans priced between $35,000 and $45,000. New versions of the CT6 sedan will be offered to customers who want a larger car starting at $50,000.

The CT5 will be built at a factory near Lansing, Michigan, that currently builds the slow-selling Cadillac ATS and CTS models. A small luxury sedan to compete with the Audi A3 will be built in the same plant, de Nysschen said.

Cadillac will offer more SUVs, starting with a compact model called XT4, followed by a larger SUV with three rows of seats due by 2019 to compete with vehicles such as Volvo's current XC90 model.

Volvo, owned by China's Zhejiang Geely Holding Group [GEELY.UL], scored a public relations coup by announcing plans earlier this month to power all its vehicles with either hybrid or all-electric technology starting in 2019. The move challenges Tesla Inc (TSLA.O), which has eclipsed more established brands with tech savvy luxury buyers.

Cadillac has plans "not dissimilar to what Volvo has announced," with more electrified vehicles launching in the second half of the next decade, de Nysschen said.

To stay abreast of Tesla and others in the industry's technology race, Cadillac will launch later this year its Super Cruise system that enables hands-free driving up to 85 miles (137 km) per hour.

Is the GS still viable as well?

 

[mmcartalk]

Although this specific article doesn't state it (others do), this action is not limited to Cadillac. Other GM divisions are also considering axing some sedan lines.

(I'm glad I got my new Lacrosse order in when I did.........it may also be on the chopping-block).

 

[IS-SV]

Although this specific article doesn't state it (others do), this action is not limited to Cadillac. Other GM divisions are also considering axing some sedan lines.

(I'm glad I got my new Lacrosse order in when I did.........it may also be on the chopping-block).

Yes, I heard same on the news (tv).

 

[Gecko]

I think we will probably see some strategy shifts like this across the market, and this is probably just the beginning. 5 Series, E Class and A6 are dominant in the midsize luxury sedan segment so I won't be surprised to see other players like Lexus and Cadillac do something entirely different. I can see Lexus upscaling ES and adding AWD and F Sport to try to capture the folks who might have purchased a GS. Similar for Cadillac is narrowing down their choices and consolidating resources with CT5 and CT6.

Look at what happened in the Minivan segment years ago... Ford and GM gave up and left it to Chrysler, Toyota and Honda.

I think we'll see some similar moves with mainstream midsize sedans. I wouldn't surprised to see a car like the Chevy Malibu drop off because the Camry, Accord, Altima and Fusion are so dominant.

OEMs are going to have to move quickly to make strategy shifts that put their dollars into models with the most potential. Period.

 

[mmcartalk]

I can see Lexus upscaling ES and adding AWD and F Sport to try to capture the folks who might have purchased a GS.

I can see an ES with AWD (IMO, it is long overdue)...but not with F-Sport. There would be very few takers on an ES F-Sport package......the vast majority of ES buyers simply don't want a stiffer, performance-oriented suspension or tires. They buy the car because of its generally, laid-back, soft, relaxing road-manners. A sport package would probably just screw that up.

I think we'll see some similar moves with mainstream midsize sedans. I wouldn't surprised to see a car like the Chevy Malibu drop off because the Camry, Accord, Altima and Fusion are so dominant.

The Malibu is a surprisingly good mid-size sedan, and is a solid player in that segment. Unless people simply stop buying it, I don't see it going anywhere.

 

[Gecko]

I can see an ES with AWD (IMO, it is long overdue)...but not with F-Sport. There would be very few takers on an ES F-Sport package......the vast majority of ES buyers simply don't want a stiffer, performance-oriented suspension or tires. They buy the car because of its generally, laid-back, soft, relaxing road-manners. A sport package would probably just screw that up.

People said the same thing about the RX and LS - and look at sales of F Sport on those models. ES F Sport is happening.

The Malibu is a surprisingly good mid-size sedan, and is a solid player in that segment. Unless people simply stop buying it, I don't see it going anywhere.

Despite its credentials, look at sales. Not good.

 

[mikeavelli]

Despite its credentials, look at sales. Not good.

The Malibu could be designed by any company the last 20 years. They had nailed the car two generations ago. Sad.

 

[mmcartalk]

People said the same thing about the RX and LS - and look at sales of F Sport on those models. ES F Sport is happening.

Hey, I've been wrong before......but I'll believe an ES F-Sport when I see it.

 

[mmcartalk]

The Malibu could be designed by any company the last 20 years. They had nailed the car two generations ago. Sad.

I'll admit the interior they did on that version (which was actually the twin to the Saturn Aura) was better than on the current one. But the road-manners and refinement on the current one, IMO, are superb. Its only real lack is a V6.

 

[mikeavelli]

I feel Caddy should have stayed the course with the strategy they had...

CTS
DTS
STS
XLR

Escalade
SRX

They could have slotted something under the CTS and brought the ATS.

Instead they

Bring ATS
Moved CTS up in price
Get rid of DTS, bring a XTS which is the same thing basically
get rid of STS
drop XLR
Bring CT6 which has been a dud and is another confusing tweener

Escalade is their brand
SRX is now XT5 which is confusing
Sub XT5 coming

The names and strategy is just confusing. Shame as the lineup is solid though solid doesn't cut it these days like it used to.

 

[mmcartalk]

Get rid of DTS, bring a XTS which is the same thing basically

How?

The DTS is significantly smaller, has a far more finely-detailed interior, better fit/finish, and offers the AWD option for bad weather that the DTS never got (but, IMO, should have). The DeVille/DTS, however, had a more compliant suspension/tires, and IMO was significantly more comfortable to drive as a cruiser. Same with the Lincoln MKS, BTW, compared to the old Town Car.

 

[mikeavelli]

How?

The DTS is significantly smaller, has a far more finely-detailed interior, better fit/finish, and offers the AWD option for bad weather that the DTS never got (but, IMO, should have). The DeVille/DTS, however, had a more compliant suspension/tires, and IMO was significantly more comfortable to drive as a cruiser. Same with the Lincoln MKS, BTW, compared to the old Town Car.

The DTS and XTS is aimed at the same target market. Not sure why the name change.

 

[mmcartalk]

The DTS and XTS is aimed at the same target market. Not sure why the name change.

Agreed they were aimed at the same market (at least on paper)...but the XTS did not offer the same level of driving-comfort. Its wheelbase was shorter, suspension stiffer, and tires more aggressive.

On the name change, I don't know for sure, either, but my guess is that, since "X", in automotive-speak, often means AWD, the change to XTS signified the new-found AWD option (or at least the availability of that option) that the DTS lacked.