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    Cadillac's New Marketing Chief: 10 Years To Make It A Global Brand


    William Maley

    Staff Writer - CheersandGears.com

    November 11, 2013

    Cadillac has been hard at work for the past ten years trying change its reputation from being an automaker who builds land yachts to being a bone-fide luxury automaker who can take the fight to Germans. Now General Motors has been planning to make Cadillac a global brand, but Cadillac's new Marketing Chief sees a long ahead for that.

    Uwe Ellinghaus, Cadillac's new Marketing Chief (starting January 1, 2014) and formerly of BMW AG tells Reuters that it could take up to ten years for the brand to become a viable global brand. He explained that while the brand has a great history and an impressive lineup, it doesn't have an "overarching message" to tie it all together.

    "People know Cadillac, people like Cadillac, but they don't find Cadillac always particularly relevant. This is something that communication ... can easily overcome. It just takes time," said Ellinghaus.

    What is his plan to help make Cadillac a global player? To start, his primary focus will be on the U.S. and China which is his estimation will take about five years. From there, the focus will move towards Europe.

    "It's not too late. The brand has a cachet and a prestige that is already a good prerequisite for building its emotional character even further," said Ellinghaus.

    "I have a really, really realistic chance to establish Cadillac to what it never was, a really global premium brand that is on eye level with all the other premium competitors."

    Source: Reuters

    William Maley is a staff writer for Cheers & Gears. He can be reached at william.maley@cheersandgears.com or you can follow him on twitter at @realmudmonster.

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    Didn't they say the same thing 10 years ago?

    Yes, the CTS was going to challenge the 3-series, the STS would challenge the E-class, the SRX would take on the BMW X5, and the XLR would compete with the Mercedes SL. None of that really worked, 2 of those products are dead, the CTS stuck around and the SRX went FWD to take on the RX350 and Lincoln MKX.

    The ATS and CTS are now better equipped to take on the Germans, but the rest of the product line needs some work. It could be doable in 10 years, but they need to improve marketing and distribution channels while enhancing the product line. That will cost a lot of money, and I don't know if Cadillac can keep up with BMW or Mercedes in that regard.

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    The RX350 is where the sales are, so it's right that Cadillac would chase that rather than the X5. Besides, on interior room the SRX is more like an X3... so Cadillac is getting people to pay RX350 prices for something that is X3 sized inside and is selling a bunch of them too... more than BMW has been selling X3s or MB selling GLKs.

    Now, if your argument is that Cadillac needs an X5 sized and priced crossover, I'll agree with you there.

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    Cadillac needs a middle size SUV, but the SRX is actually 1 inch longer than an M-class and 1 inch shorter than an X5, it is sized right with them. So if they make an SUV off the CTS platform sized like an X5 they will have 2 SUVs the same size. If they make an X5 competitor then the SRX has to shrink.

    Maybe this is part of the problem, Cadillac wants to compete with Lexus. Lexus isn't a global luxury brand, they are an American luxury brand that lives on vehicles under $40,000. The RX sells about 7k a moth, the ES 6k a month, and the IS 3500 a month, no other Lexus topped 1,500 units last month. The GS, GX, LX are duds, always has been, the LS sells okay because it is $20k cheaper than the German rivals. Lexus is just a step above Buick, a better managed and marketed Lincoln if you will, they will never make it globally. They make it in the USA because 300,000 people a year get rid of their Camry and 20% of those people mindlessly buy a Lexus.

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    SMK, this might be news to you, but the size of the car is not determined by the exterior, but by the size of the interior. The X3, GLK, and SRX are all in the same size class regardless of exterior dimensions.... and only in the full size class of SUVs does exterior size even begin to matter. No one..no one... shopping in this interior size/price class is going around with a measuring tape to measure the exterior of the car.

    Why can't you get this?

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    SMK, this might be news to you, but the size of the car is not determined by the exterior, but by the size of the interior. The X3, GLK, and SRX are all in the same size class regardless of exterior dimensions.... and only in the full size class of SUVs does exterior size even begin to matter. No one..no one... shopping in this interior size/price class is going around with a measuring tape to measure the exterior of the car.

    Why can't you get this?

    I get that, but why is the SRX so poor at packaging and on a FWD platform from Chevy? It is like saying the Malibu has the same interior size as a Hyundai Elantra (which is probably does) and saying people should cross shop the Malibu and Elantra, when the Malibu is way bigger on the outside.

    Regardless, the SRX doesn't really compete with anything the Germans make, it competes with Lincoln, Lexus and Acura which is where the soccer mom crowd of the entry lux market lives and it is a big market.

    I do think if Cadillac really steps up their game they can put a hurt on Lincoln, Acura and Lexus. Acura and Lincoln are already dwindling and Lexus is living off one cross over and buyers over 70. If Cadillac can make themselves cool again and get some younger buyers they can overtake Lexus in 10 years time.

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    I get that, but why is the SRX so poor at packaging and on a FWD platform from Chevy?

    The Lexus RX shares it FWD platform with a Toyota, nothing different there...premium brands that are paired with mass market brands share parts---Audi's SUVs share parts with VW. Infiniti with Nissan, Acura with Honda, Lincoln with Ford. BMW and M-B are unique in that they don't have mainstream brands to share with (Mini and Smart are low volume niche brands) so they don't have to compromise.

    Edited by Cubical-aka-Moltar
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    The SRX beats any two of the Germans combined in sales.... what do you mean it doesn't compete?

    And what X3 or GLK isn't driven by a Suburban soccer mom? It is marketed directly AT soccer moms!

    The Malibu is an abnormality, I wouldn't use that as an example for anything... though I believe in my review of the Malibu, I chastised its interior room for being close to the Jetta with the Jetta actually feeling roomier. The problem there is that the Jetta and Malibu compete at vastly different starting prices. The SRX, and the Germans are very very close in price and interior room... so much so that the fact the exterior of the SRX is larger doesn't matter too much.

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    Interesting comparo in Car and Driver with the CTS vs the Germans, and the CTS took 2nd beating the E350 by 1 point (due to the CTS getting a 25 in fun to drive vs 18 for the E350). The A6 was the winner since C/D loves that car, but what is interesting is the 5-series fall from grace. They mention how there is very little E39 left in the 5-series and the engine/transmission is really the only good thing left about the 5-series. That car has gotten big and heavy and they bashed the steering and suspension. So there is opportunity for Cadillac here as the CTS was the best in handling and most fun to drive, although also the slowest and the 3.6 lacked refinement. The CTS 3.6 was $67,000 as tested, so the coming challenge for Cadillac is going to be getting people to pay that much for a CTS.

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    ^ the challenge already is here and has been met- lightest, best handling & most fun to drive. The rest will follow... but I hope Cadillac doesn't fall into the trap Daimler & BMW fell into; an all-out pursuit of sales volume. Seeing a 5-series or E350 (how did a Ford van get into that comparison??) every stop light is the anthesis of exclusivity.

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    So is Cadillac's path to global success to sell 1,500 CTS per month and 2,500 ATS in the USA, and even less outside the USA? Lexus has had over 10 years of the IS and GS, and over 20 years of the LS, and they still are basically America only and the IS And GS are slow sellers. The Lexus brand survived on the backs of the ES350 and RX350. Cadillac needs the ATS and CTS to sell because they don't have a version of the Malibu to sell, although they do have a version of the Impala and Equinox to prop them up.

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    Lexus has only recently tried to crack into the European market. In China, Lexus has a bigger uphill battle due to a little fight China and Japan had 70 years ago. Cadillac has more potential for global growth than Lexus does for these two reasons alone.

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    Lexus has only recently tried to crack into the European market. In China, Lexus has a bigger uphill battle due to a little fight China and Japan had 70 years ago. Cadillac has more potential for global growth than Lexus does for these two reasons alone.

    They both face the same problem in Europe. They don't have the distribution channels or the popularity or trust of consumers there. Europeans for the most part like European cars. Plus they like diesel and the top 2 selling Lexus in Europe I think are the CT200h and RX400h; their hybrids get a little bit of traction because of the gas mileage. Cadillac doesn't have 40-50 mpg cars, so that is another disadvantage.

    Cadillac does have a good chance in China, although Buick is the GM band winning there, so they have to get Buick people to trade up to Cadillac. All 3 Germans do well in China too though, and Audi is the strongest of the 3 and Mercedes the weakest, sort of the opposite of the American market.

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    The key for Cadillac in the EU is diesel engines and a vastly upgraded dealership channel.

    Buick is an aspirational brand in China, but they are also selling a rebadged old Opel Astra as the Buick Excelle XT for about $15000 while our Buick Verano is sold as the Buick Excelle GT for about $21,000, so though they are aspirational, they are also attainable.

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    Cadillac needs to remove the N/A 3.6 from the ATS and CTS as it is becoming a weakling. It's not good image when the bigger engine car is slower than the smaller engine car. (MT CTS 2.0 and 3.6 test)

    I think turbocharging the entire Caddy sedans lineup would be kosher to give it unique powertrain, while using the same GM parts and bins.

    ATS - 1.6T, 2.0T (or 2.0T in two flavors) and 3.6 single turbo

    CTS - 2.0T, 3.6 single and twin turbo

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    Cadillac needs 4 and 6 cylinder diesel power mated to an 8-speed transmission in a bad way. A turbo 4 diesel would easily out torque the 2.0T or 3.6 V6 in the ATS and CTS and probably give back 45 mpg and still get you 0-60 in 7 seconds which is adequate for most of the driving world.

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    Cadillac needs to remove the N/A 3.6 from the ATS and CTS as it is becoming a weakling. It's not good image when the bigger engine car is slower than the smaller engine car. (MT CTS 2.0 and 3.6 test)

    I think turbocharging the entire Caddy sedans lineup would be kosher to give it unique powertrain, while using the same GM parts and bins.

    ATS - 1.6T, 2.0T (or 2.0T in two flavors) and 3.6 single turbo

    CTS - 2.0T, 3.6 single and twin turbo

    Not a bad idear.... but I'm thinking they might be better off doing a turbo 2.5 to replace the N/A 3.6. The 2.5 is very smooth for a large 4-banger.

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    Cadillac needs to remove the N/A 3.6 from the ATS and CTS as it is becoming a weakling. It's not good image when the bigger engine car is slower than the smaller engine car. (MT CTS 2.0 and 3.6 test)

    I think turbocharging the entire Caddy sedans lineup would be kosher to give it unique powertrain, while using the same GM parts and bins.

    ATS - 1.6T, 2.0T (or 2.0T in two flavors) and 3.6 single turbo

    CTS - 2.0T, 3.6 single and twin turbo

    Not a bad idear.... but I'm thinking they might be better off doing a turbo 2.5 to replace the N/A 3.6. The 2.5 is very smooth for a large 4-banger.

    The reason for the single turbo V6 is that the perception is still not there for a premium 4 banger. Having entry level 4 banger is not unacceptable for that class.

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    • By William Maley
      Cadillac is going to have a quiet 2017, but 2018 looks to be a blockbuster year as the first of their needed crossovers will launch - the compact XT3. Thanks to a spy photographer, we have gotten our first look at it.
      General Motors' camouflage department did a really good job of covering up the XT3, so we can't really tell much about the design except that it looks like an even smaller XT5. One detail they weren't able to cover up is the intercooler, leading us to believe that the XT3 will come with turbocharged power - most likely the 2.0L turbo. A nine-speed automatic and the choice of front or all-wheel drive is likely. Platform-wise, expect the XT3 to use the underpinnings of the Chevrolet Equinox and GMC Terrain.
      Source: Car and Driver
    • By William Maley
      GM Announces January U.S. Sales, Affirms Positive Outlook
      DETROIT — General Motors (NYSE: GM) U.S. dealers delivered 195,909 cars, trucks and crossovers in January, down 3.8 percent year over year. Retail sales totaled 155,010 units, down 4.9 percent, and the company set a new January record for average transaction prices.
      “In early January, we focused on profitability while key competitors sold down their large stocks of deeply discounted, old-model-year pickups,” said Kurt McNeil, U.S. vice president of Sales Operations. “We gained considerable sales momentum as we rebuilt our mid-size pickup, SUV and compact crossover inventories from very low levels following record-setting December sales.”
      Inventories of most of these products were in the 30 – 50 days’ supply range at the beginning of January.
      January Highlights (vs. Jan. 2016)
      GM estimates that the seasonally adjusted annual selling rate (SAAR) for light vehicles was approximately 17.6 million units. GM’s ATPs, which reflect retail transaction prices after incentives, rose $1,200 per unit to $34,500, a new January record.  GM was the only domestic automaker and one of only two full-line automakers to reduce incentives as a percentage of ATP. GM spending was 12.7 percent, down 0.3 points, and the industry average was 12.3 percent, up 1.3 points. Rental deliveries were down 1 percent. Total fleet sales were up 1 percent on a 12 percent increase in Government deliveries and a 1 percent increase in Commercial sales. GM’s fleet mix was 21 percent of total sales. Small business deliveries were up 4 percent. Chevrolet Retail Sales
      The Cruze, up 22 percent, the Volt, up 56 percent, and the Trax, up 40 percent, had their best-ever January retail sales. Total sales were also January records. Spark deliveries were up 40 percent. Bolt EVs, which were available in California and Oregon during the month, had the fastest days to turn in the industry at 7 days. The Tahoe, up 8 percent, and Suburban, up 11 percent, had their best January retail sales since 2008. The Equinox was up 4 percent. The Colorado was up 9 percent for its best January retail sales since 2005. Total sales were also the highest January since 2005. Sales of the Silverado HD pickup were up 32 percent for the truck’s best January retail sales since 2008. Total HD sales were also the best since 2008. Buick Retail Sales
      Crossover deliveries were up 20 percent, driven by higher Encore sales and the first-ever Envision. Average transaction prices were up 9 percent, four times better than the industry average growth. GMC Retail Sales
      Deliveries of the Acadia were up 15 percent. Sierra deliveries were up 2 percent, for the truck’s best retail January sales since 2002. Average transaction prices were up 7 percent, more than three times better than the industry average growth. Cadillac Retail Sales
      Cadillac sales were up more than 1 percent. Crossover deliveries were up 11 percent, on the strength of the new XT5. Total Escalade deliveries were up 10 percent, driven by 7 percent increase in Escalade ESV retail sales. Average transaction prices were the highest in the brand’s history at $55,300, up about $1,000 year over year. GM Momentum Continues to Grow
      In 2016, GM was the industry’s fastest-growing full-line automaker on a retail sales basis, and Chevrolet has been the fastest-growing full-line brand for two consecutive years on a retail basis. Chevrolet grew retail market share in 2015-2016 by almost one full percentage point, which translates to more than 120,000 incremental sales.
      “Our go-to-market strategy in 2017 is the same as 2016,” McNeil said. “We are focused on strengthening our brands, growing retail sales and share, reducing daily rental deliveries and maintaining our operating discipline.”
      GM is optimistic about the year ahead because the economy is strong and the company’s four brands are dramatically expanding their product offerings in fast-growing crossover segments.
      Industry sales are expected to remain at or near record levels, with higher GM retail sales and market share on a year-over-year basis. GM’s deliveries to daily rental companies are expected to decline as a percentage of total sales for the third year in a row. GM will continue to match production with customer demand. Previously announced plans to reduce passenger car production at plants in Lordstown, Ohio and Lansing, Michigan were implemented at the end of January. GM’s operating discipline will help drive continued improvements in brand health and resale values. During January, IHS Markit said GM had the highest overall loyalty to a manufacturer for the second year in a row. Also, Kelley Blue Book gave seven Chevrolet and GMC vehicles awards for outstanding resale value, more than any other manufacturer. Ten all-new or recently redesigned crossovers are expected to drive GM’s 2017 sales results, including two new compact models, which will compete in the industry’s largest segment. Crossover Launches by Brand
      Chevrolet will have the industry’s broadest and freshest lineup of utility vehicles behind the 238-mile range Bolt EV; the 2018 Equinox, which arrives in showrooms soon; and the all-new Traverse, which arrives this summer. At Buick, crossovers are expected to account for as much as 75 percent of retail deliveries, up from 66 percent in 2016, driven by the Encore, Envision and Enclave. GMC, which has the highest average transaction prices of any non-luxury brand, will launch the all-new 2018 Terrain in late summer. It will complement the redesigned Acadia, which went on sale in late summer 2016. Cadillac will benefit from a full year of production of the new XT5 crossover, which is now the second best-selling vehicle in its segment.
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