Sunday, November 29, 2015

Sedans Are Still Everything For Cadillac

Alexander Carabitses

The other night, I found myself surfing the web as I looked to see if any plans to produce a die cast version of the Cadillac CT6 had been announced.  In my New York Auto Show post, I expressed my feelings towards this new sedan, and how I felt that its proportions were exquisite.  I hope that a nice scale model of this car (along with the Ford GT, Lincoln Continental Concept, and Buick Avenir) is produced, as I currently do not drive.  Even if I did, I am many years away from being able to purchase a CT6, let alone any Cadillac.

While Cadillac may have a future customer in the brewing, it is no secret that the brand is struggling to sell cars to current buyers.  Given that the products that the brand is launching are phenomenal, it is quite obvious that the brand is still suffering from two problems, the first of which pertains to their image, which translates into, "GM can't market Cadillacs for the life of them!" Cadillac is still perceived as a brand for senior citizens by the general public.  This is proved through the fact that this past April or May (I can't remember which), the XTS was the brand's best selling car.  Keep in mind, this is a front wheel drive car, predominantly bought by the stereotypical Cadillac buyer and limousine fleet owners.  The only bright spot here is that in China, the average Cadillac buyer is fifteen years younger than the US buyer, and China is still an important market for the industry.

The second problem that the brand faces is that it's in desperate need of crossovers.  The new XT5, as great as Cadillac hopes it will be, is a replacement for the aging SRX, which was still selling well.  The XT5 is not enough.  It competes with vehicles like the BMW X5, but Cadillac still lacks competitors for the smaller BMW X3 and X1, as well as the X7 (a rival to the Mercedes GLS, previously called the GL) that will be launched in a few years time.  The Escalade sells well, but it competes with the Range Rover, as an uber luxury SUV.  Crossovers are the hottest vehicles in the market, as consumers are beginning to favor them over sedans, in all price sectors of the market.  Cadillac is working on crossovers now, the first of which will arrive for 2018, and to be honest, 2018 can't come soon enough.
(Image credited to Cadillac)

Now, I have written on Cadillac twice before and I have brought up similar arguments, but my reason for writing this post is a little different.  If it turns out that launching new crossovers will lift Cadillac sales from the ashes, will the brand forget about the big picture?  Allow me to explain:  If Cadillac were to (hypothetically) launch all of its crossovers today, they all sold exceptionally well, and Cadillac became the number 1 global luxury brand overnight, would the brand forget about its ambitions to change its image, especially if its crossovers were appealing to relatively younger buyers?  Unfortunately, I think that would be the case, and given how the "new GM" is only different from the "old GM" in that it has four fewer brands and all of them make great products now, I think that corporate politics would kill off the brand's aspirations.

Here's my opinion, if the hypothetical scenario I just mentioned actually happened and I were running Cadillac, I would sit back in my chair in New York and say to my team, "Well guys, our safety cushion is in place.  We finally have vehicles that are appealing to younger buyers, in the most profitable segment in the US.  Now let's begin conducting research from these new buyers and figure out how to market the rest of the line to appeal to that same customer age-base."  That right there is the ticket.  As a luxury brand, crossover sales are important for making money, but they don't reflect the brand's image status, which in turn is why sedans are so important.  In the luxury market, if you are selling a crap load of crossovers and sedans to the same clientele, then you are obviously doing something right, but if  your sedan sales lag far behind your crossover sales, and your sedan buyers are far older than your crossover buyers, then you know you have an image problem.  Sedan sales reflect a luxury brand's image, and it is sedan sales that Cadillac needs to focus on improving, even if its new crossovers are a hit.

Have a good week.

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