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  • William Maley
    William Maley

    Cadillac's Dealers Hold On As de Nysschen's Plan Comes To Into Action

    Cadillac's Dealers Feel the Brunt as de Nysschen's plan goes into action

    Imagine you are a dealer sitting in a meeting and the head of the brand that you sell tells everyone that sales will get worse before they get better. Well that was what Johan de Nysschen, Cadillac's president told dealers last summer. Now dealers are getting a first look at 'worse' looks like.

    Automotive News that a number of dealers have lost on incentive cash in the first quarter because they missed sales targets set by GM. Discounts and lease offers have also dried up as well. Previously, Cadillac offered deals on the ATS and CTS to help remove the massive stock sitting on dealer lots.

    This is reflected in Cadillac's sales. ATS dropped 23 percent, while the CTS saw a 47 percent drop. Cadillac's marketing chief Uwe Ellinghaus said in a interview last month that April would be "the first month where we see the natural demand for ATS and CTS."

    Now the slump in sales is part of de Nysschen's plan to get Cadillac on the right footing with a smaller supply of vehicle and incentives that are modest. The plan also includes better marketing and new products through 2020.

    Dealers support de Nysschen's plan, but they are worried about how long the plan will take and whether it actually works.

    "The dealer council has a lot of faith in Johan's long-term plan. But the sales decline is a bit of a tough pill to swallow with the industry rocking right now," said Keith Harvey, a member of Cadillac's National Dealer Council.

    Source: Automotive News (Subscription Required)


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    If you're going to dry up incentives so drastically, you need to adjust the price as well.  I get that he doesn't want to appear like they are giving discounts for their cars, but then the MSRP needs to be adjusted.

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    CTS sales in 2014 were the lowest ever.  And the ATS is selling at a slower rate than the 2004-2006 CTS that used to be good for 4,000 units a month at the same price point.  Both cars need upgraded interiors, a better take on the Art and Science look and both need to replace CUE.  GM should just pay Google or Apple $100 million to have them make an in car info-tainment system and be done with it.

     

    The big problem is marketing, and after years of GM and others convincing everyone they need a crossover (because they got better margins on them than cars) they now have to convince people to buy a RWD (or AWD) sedan.  From the early 90s when the Explorer and Grand Cherokee hit, automakers made SUVs = luxury in advertising. 

     

    So now, how does Cadillac make sedans cool and convince people to buy sedans instead of crossovers?  Because people are spending $40-50k on Honda Pilots, RX350s, Buick Enclaves, Tahoes, Grand Cherokees, etc.  And a lot of them don't use the 3rd row or tow anything.   Cadillac needs to get that crossover market buying their cars and say this is more luxurious, better handling, safer, better braking, more fuel efficient than a crossover, and bring those buyers in.

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    If you're going to dry up incentives so drastically, you need to adjust the price as well.  I get that he doesn't want to appear like they are giving discounts for their cars, but then the MSRP needs to be adjusted.

    Not really; IMHO in Cadillac's case I think it's holding to MSRP and improving the content (i.e. eliminating the 'base models').

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    If you're going to dry up incentives so drastically, you need to adjust the price as well.  I get that he doesn't want to appear like they are giving discounts for their cars, but then the MSRP needs to be adjusted.

    Not really; IMHO in Cadillac's case I think it's holding to MSRP and improving the content (i.e. eliminating the 'base models').

     

     

    Yes, but they still need to clear out the existing inventory on the lots. 

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    We traded a 2008 CTS Premium Sport model on a  a 2015 Cadillac ATS Coupe (Performance) with various discounts, a good trade in, and an ultra low interest rate we feel it was an okay deal. To be  frank the problem with the new CTS and ATS are that their pricing is at least $5- 6000 too high, and the V models to come are $10- 15,000 too high.  End of story.

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    CTS isn't priced too high, it is the cheapest car in the segment.

     

    E-class:  $52,650

    Jag XF:  $50,175

    5-series: $49,950

    GS350:   $48,600

    Audi A6:  $46,200

    CTS:        $45,345

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    We traded a 2008 CTS Premium Sport model on a  a 2015 Cadillac ATS Coupe (Performance) with various discounts, a good trade in, and an ultra low interest rate we feel it was an okay deal. To be  frank the problem with the new CTS and ATS are that their pricing is at least $5- 6000 too high, and the V models to come are $10- 15,000 too high.  End of story.

     

    This is the typical GM buyer mentality Cadillac has to meet or overcome.

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    The big problem is marketing, and after years of GM and others convincing everyone they need a crossover (because they got better margins on them than cars) they now have to convince people to buy a RWD (or AWD) sedan.

    So now, how does Cadillac make sedans cool and convince people to buy sedans instead of crossovers?

    This is the very same boat Porsche (among others) is in. Porsche "convinced" everyone they need a SUV, and now they are primarily a SUV brand (65% sold last month were NOT cars)… because that's where the profits are. How will Porsche convince people that their sports cars are cool and convince them to buy them??

     

    Or maybe… this is also not a problem.

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    Porsche still makes big margins on SUVs, you can run a Macan up to $100k.  I mean SUVs in general.  People are spending $45-50k on a Jeep, Tahoe, Explorer, Pilot, etc and those aren't luxury brand products.  Cadillac should be able to steal those type of buyers and get them into a luxury car rather than a non-luxury SUV that costs the same money.

     

    I think it easier to steal crossover buyers than 5-series/E-class buyers.  But Cadillac has to make sedans seem cooler and better than crossovers, and take those buyers away from Ford, Jeep, etc.

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    Porsche flipped itself from a sports car maker to a sporty SUV maker. 

    No doubt the profit margins are much higher than on the cars, which they were losing money on.

    What Porsche should have done is strived to make their cars cool again and make them the best in their segment.

    IMO, they took the easy way out. :rolleyes:

     

    Jeep started the luxury SUV segment in the 1960s. Regardless of what some think is a 'luxury brand', individual product determines a 'luxury' label. mercedes, obviously, makes a number of non-luxury sedans; just because they all have the same grilles/emblems doesn't make those models 'luxury'.

     

    But today's market has largely & commonly placed SUVs on par with 'cars', erasing the 'detriment' a -say- 1975 Suburban or Land Rover had with a very plain & spartan interior and next to no amenities. Now a loaded Tahoe LTZ has just about all the common features lux SUV buyers are looking for and regardless of the emblem, it is outfitted & priced as a luxury product. Just like mercedes- not all are (or are not) luxury models under their respective brands.

    Edited by balthazar

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    Porsche charges $360 for a rear wiper on a 911, another $3,850 for alantera seat inserts and $1720 for painted air vent slats.  With stupid overpriced options like that, I can see why they make $20,000 margin per car. 

     

    Are you suggesting that Cadillac follow Porsche and become primarily an SUV maker?  Then we wouldn't need GMC, you could just have 4 crossovers with the Escalade at Cadillac.

     

    Cadillac is so hell bent on going after BMW, but it isn't working.  They would have an easier time getting people spending $40-50k on a domestic SUV to buy a CTS than getting a 5-series driver to buy a CTS.  They should re-target the advertising.

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    You'd think with "stupid overpricing' like those examples, there would be no way POSSIBLE to lose money on sports cars… but Porsche said they were.

     

    I'm not suggesting Cadillac build only SUVs, I'm stating that a brand known for a lot of hardcore sports cars now primarily exists to build SUVs. In other words, Porsche doesn't at all seem to mind being a SUV brand… and perhaps Cadillac doesn't mind also not selling proportionally as many cars as they used to. These things are really only of interest to Corporate planners, not enthusiasts or the general consumer.

     

    I've said it before, I really don't care how many vehicles Cadillac sells, I just want the marque to be healthy and last another 125 years.

    • Upvote 2

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    Johan "de Nissan" knows nothing. Infiniti still isn't a premium brand. Only an Americn can fix Cadillac. The new CT names are dumb. I'm convinced he is here to kill the Cadillac brand.

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    Interesting times we live in as Jeep just announced they are going to build a luxury SUV to compete against the Germans and Cadillac.

     

    http://www.bloomberg.com/news/articles/2015-05-13/jeep-plans-luxury-model-to-take-on-mercedes-suvs-and-range-rover

     

    So it will be interesting to see how everyone else deals with the model change of who is a luxury maker and what auto's they actually sell.

     

    I think this slow down is good as it will get rid of the dealers who really do not have the pockets to serve the luxury market and have survived based on just moving steel.

     

    Better stronger network of dealers and those willing to invest in better showrooms and service centers will position Cadillac as a strong brand to compete against.

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    If you're going to dry up incentives so drastically, you need to adjust the price as well.  I get that he doesn't want to appear like they are giving discounts for their cars, but then the MSRP needs to be adjusted.

    Not really; IMHO in Cadillac's case I think it's holding to MSRP and improving the content (i.e. eliminating the 'base models').

     

     

    Yes, but they still need to clear out the existing inventory on the lots. 

     

    True

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    If you're going to dry up incentives so drastically, you need to adjust the price as well.  I get that he doesn't want to appear like they are giving discounts for their cars, but then the MSRP needs to be adjusted.

     

    See I believe they should stay the course, keep prices where they are, and add to their line up and sales will come. How and why would anyone think that car sales would rise in a market with high CUV sales? Cadillacicon1.png sales will improve per model when they offer other products that get people in the showroom. You have no idea how many SRX sales are converted from Escalade desires.

    Edited by Cmicasa the Great

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    The largest issue with jumping with reinventing their cars  Cadillac trying to compete with competitors that simply offer more variety of product. The CTS would benefit, in terms of sales, as well as customer retention, if they offered the mix that Benz offers with the EClass . I can get an Eclass sedan, coupeicon1.png, wagon, convertible, AMG , diesel, or hybrid. There is no way that we or they should expect sales in Eclass or 5 Series numbers if they don't have a similar line-up. 

    The last gen CTS at least had a wagon which accounted for 3% of sales, a Coupe, 30% of sales, and a Vseries, 9% of sales, to add to the sedan'sicon1.pngnumbers. This is what happens when you delete more than 40% of the options, you, ironically, no, logically, lose 40% of your sales. 

    Just look at the numbers. Better yet! Hey JDN and GM look at the numbers. Take the absence of the Coupe, for instance. I bet you good money that the savingsicon1.png is nonexistent when the higher ATPs of those previous gen. trims come in to play. The CTS Coupe was priced about $4,000 more than the sedan if memory serves me. There justification for not having a Gen3 Coupe is most likely the fact that the ATS Coupe and ELR exist. So what? Benz AND BMW have mid size coupes. Benz and BMW have small two doors as well. They also have sport coupes. Of course both of theirs have convertible tops while Cadillac's can't even get a Damn sunroof. rolleyes.png The ELR is sexiest Coupe on the market and I can't even get a CTS Coupe style tilt sunroof. 

    To hell with the constant ridicule, thoughts of buyer apprehension because of price or brand cachet. Anyone not understanding why Cadillac sales are down is just blind and not willing to look at the problem straight on; no car for my particular desire or niche? I'm going to the competition.

     

    Offer a Stick in the CTS. Niches add up.  The thing is that these aren't even expensive in execution versus payoff. Quite frankly I would even suggest that in this particular situation, and as the only one in the class with a stick, they could charge slightly more than the automatic simply because they would have the only game in town. 

    Being different is a shoe in for more sales, 1 piece at a time.

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    I can't reveal any more than this;  A new CUE is very near on the horizon.

     

     

    U mean like the upcoming features and improvements like:

     

    Improved system speed and performance
    Faster, more accurate map loading and voice command execution
    Faster service reprogramming
    Redesigned navigation interfaces
    Single press mute navigation voice/cancel route
    Expanded cities with 3D maps
    Bluetooth Media browsing  

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    You'd think with "stupid overpricing' like those examples, there would be no way POSSIBLE to lose money on sports cars… but Porsche said they were.

     

    I'm not suggesting Cadillac build only SUVs, I'm stating that a brand known for a lot of hardcore sports cars now primarily exists to build SUVs. In other words, Porsche doesn't at all seem to mind being a SUV brand… and perhaps Cadillac doesn't mind also not selling proportionally as many cars as they used to. These things are really only of interest to Corporate planners, not enthusiasts or the general consumer.

     

    I've said it before, I really don't care how many vehicles Cadillac sells, I just want the marque to be healthy and last another 125 years.

     

     

    In another conversation elsewhere a person commented that GM is a "company that know(s) how to manufacturer and sell trucks" considering the fact that Cadillac, as a whole with regards to sales is losing market due to not having "trucks" (read more SUV/CUVs) to accommodate the trends of the luxury market currently. 
     
    Who can honestly say that people would make some of the crazy comments being made about brand cachet or pricing if Cadillac sales were still in growth like 2013? Who can actually say that they would be if THEY had a new XT5, XT3, and XT7 on the lot Now? I mean Right Now. Just based on trends of CUV sales Cadillac would be selling at the very least more than Audi

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    We traded a 2008 CTS Premium Sport model on a  a 2015 Cadillac ATS Coupe (Performance) with various discounts, a good trade in, and an ultra low interest rate we feel it was an okay deal. To be  frank the problem with the new CTS and ATS are that their pricing is at least $5- 6000 too high, and the V models to come are $10- 15,000 too high.  End of story.

     

    This is the typical GM buyer mentality Cadillac has to meet or overcome.

     

     

     

    I call a lot of BS on what some people type pertaining to pricing . I'm all for expecting a DEAL. But seriously? At a Cadillac dealership? The very idea that someone would even say some of the things that are being said about pricing is proof positive that Cadillac has a problem of value shoppers coming off of the years from 2008 to now. I believe a great deal of it has to do with the previous CTS being a tweener. People need to realize that the Gen 2 CTS, because it was a tweener, lost almost every comparo the magazines threw at it *due to being simply to big when being compared to the 3series, thus more weight, slower performance, or being too "low rent" when being compared to the 5series, due to a $10,000 price gap. Cadillac upped the price, yes, but they also upped the car. Perceptions have to catch up with reality in this situation or we will see them go back to mediocre vehicles that can't actually compete in any way except pricing. People can't have it both ways.I think that the current car should have been named STS and the ATS should have taken the name CTS. Better yet, the CT name changes should have been implemented when the XTS first debuted so that their would be no confusion as to what was what and what was for whom.*
     
    In the end Cadillac's shuffling of leaders may be the cause, but that seems to be on the mend with both Johan and Uwe heading the charge. I am confident that they will turn things around. I would offer that we reflect on what Johan said upon speaking to dealers last year. He warned that sales would get worse before they got better. I believe when rebooting a brand, thus time seemingly in proper fashion, it is absolutely unreasonable to believe anything else. 
     
    Cadillac discounts have shriveled on anything but leftovers. The CTS is missing almost 40% of its previous line up without the couple, Vseries, or wagon. It is directly priced with the XTS, which unlike the DTS sitting next to the 05-10 STS , is actually a competent driver despite being FWD. Again, Rebooting without the Fritz Henderson/Brian Nesbit misaligned XTS will bring more focus on the brand. The ATS is the first real entry Cadillac has ever taken seriously in its segment. It needs to be allowed to gel. The issues that are brought up, normally in regards to its backseat are new one to the lunacy as before the 3series decided to go big, losing a great deal of it's "3seriesness" it was no larger in the back seat than the ATS.
     
    If a buyer wants cheap go buy a Chevy, Honda or Honda. Heck premium? Lincoln or Buick. If you want cheap luxury then go buy used. I can promise you right now one can find a 2013 S550 for about $58,000 with about 23k on the odometer. Cadillac should not want you as a buyer if you can't stomach their prices for a competitive product. Mind you if they were still offering previous gen workmanship on the CTS, which wasn't bad, quite nice in fact, but not on the current car's level, then I would agree with your original assessment. They are not. They are offering vehicles now that are not only on par with the Germans, but in some areas surpassing them. Sales? Why are they not keeping up? They need better variety. Again, no coupe alone is losing them 30% of previous generation sales or trade in.

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    I can't reveal any more than this;  A new CUE is very near on the horizon.

     

     

    U mean like the upcoming features and improvements like:

     

    Improved system speed and performance
    Faster, more accurate map loading and voice command execution
    Faster service reprogramming
    Redesigned navigation interfaces
    Single press mute navigation voice/cancel route
    Expanded cities with 3D maps
    Bluetooth Media browsing  

     

     

    I'm talking about the guts that makes all of the above possible. 

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    Cue needs to lose the touchscreen in favor of a clicky wheel.

     

    Engines are the next phase that needs improvement.  In last months Car and Driver comparison the ATS coupe 3.6 got a 5 out of 10 in engine NVH, and a 5.6 seconds 0-60 time.   The comparable Audi S5 did 0-60 in 4.5 seconds and got a 9 in NVH.  The 335i (now 340i) was not in that test, but you know a BMW straight six is the gold standard of NVH and the 335i and C400 can do 0-60 in 4.8 or less.

     

    I'd propose removing the 2.5 L and the 2.0T from the Cadillac lineup, making the new 335 hp V6 the base engine in the $35k ATS and $45k CTS, the plugin hybrid 2.0t becomes an option for the greenies with the 3.0 tt v6 making 400 hp an option.   The coming 500 hp TT V8 would be the ATS-V and CTS V-sport.   They need to drastically increase power.  Even Infiniti dropped the G25 model in favor of making the 328 hp V6 the base engine priced against a 240 hp BMW 328i because they knew they had to have wow factor just to get sales. 

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