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NINETY EIGHT REGENCY

A Lap Behind In Luxury

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A Lap Behind In Luxury

Jerry Flint, 08.15.07, 6:00 AM ET

Forbes.com

Lexus, Mercedes and BMW have trounced Detroit on the luxury battlefield, but the war is not over. In the last few years,General Motors' Cadillac division has put up a good fight and has had some victories. Of late, however, Cadillac is again losing ground.

General Motors (nyse: GM - news - people ) is far from surrendering the luxury market. In fact, its executives are planning for a wave of future models, even though it will be years before most of these vehicles reach showrooms.

Lexus, the luxury arm of Toyota (nyse: TM - news - people ), and now the volume leader in U.S. luxury, has been widening its gap over Cadillac. This year, after seven months, Cadillac sales are 115,103, down 11%, while Lexus, at 187,343, is up 5%.

Luxury Battle

Cadillac Sales/Lexus Sales

2001

172,083/223,983

2002

199,748/234,109

2003

216,090/259,755

2004

234,217/287,927

2005

235,002/302,895

2006

227,014/322,434

2007

115,103* /187,343*

*Seven months

Source: Automotive News

I think that there is still reason to be optimistic about Cadillac. GM management recognizes the need for a luxury brand and considers Cadillac special. Jim Taylor, a well-respected engineer, leads the division and has some say in its fate. In contrast, GM runs its other car brands as mere marketing operations.

What happened to Cadillac goes back to a decision, two decades ago, to convert virtually all GM models, including Cadillacs, from rear wheel drive to front wheel drive. Front drive works well in small cars, in terms of saving weight and fuel as well as maximizing passenger space. The drawback: Front drive is less desirable in performance vehicles and big luxury cars. It took Cadillac two decades to begin reversing that decision.

Cadillac had other problems. GM leadership stopped respecting the cars and its customers. Management lost the desire to keep Cadillac design and technology ahead of others. Even today, some complain that the interiors in the big Cadillac sedans look dated and frumpy compared with those of their Japanese and German rivals.

Now, however, according to trade publication Automotive News, GM management will keep trying to make Cadillac a top-notch luxury competitor. As part of this plan, Cadillac will eventually phase out its big front-drive DTS sedan, formerly called the Deville, as well as its STS rear-drive sedan. In about four years, it will replace those two cars with a new rear-drive sedan. My talks with Cadillac officials seem to confirm this timetable.

This new sedan could determine Cadillac's fate. If management has any sense, it will deliver a vehicle that is the equivalent of a Mercedes E Class: a car that is stylish, powerful, roomy and smooth riding.

Four years is a long time. In the meantime, Cadillac has one, maybe two winners. First is the CTS sedan, a rival to the Mercedes C Class and BMW 3 Series. Sales have been dropping for the current CTS, but I would predict that the new model, coming later this month, would drive sales up to at least 60,000 a year. From all indications, GM did a terrific job with this car. The latest issue of Motor Trend magazine gushes: "It's not just the best-handling Caddy in history, but probably the best-handling American sedan ever."

Even better, GM has apparently decided to broaden the CTS lineup, which currently consists of a single four-door sedan. Look for a CTS station wagon in two years and maybe a coupe in three. I think this is a formula for success.

The rest of the current Cadillac lineup is not as strong. The Cadillac STS sedan is a stretched-out version of the smaller CTS. It was an effort to build a rear-drive sedan to compete with the BMW 5 series, but it did not match expectations. Its looks are not exactly sensational, and frankly, it is a bit small for what it was supposed to be.

Another sedan, the DTS, is actually a fine car, but its core customers, a generation of older buyers, do not represent a growth market. The Cadillac SRX, a handsome, wagon-like sport utility vehicle, has been a weak seller. GM is debating whether to replace it with a smaller crossover, which seems like a good idea. Cadillac's XLR two-seater, built off Chevrolet Corvette underpinnings, is no home run either, with only 1,165 sales in seven months. The lack of buyers is not too surprising, given that the car cost about twice as much as a Corvette.

Cadillac's Escalade, a lineup of big, bawdy sport utility vehicles, has been a winner and helped the division rebound a few years ago. The newest Escalades, restyled for model year 2006, are improved, and sales are good. Even so, it is reasonable to believe that the market will shift away from such fuel-thirsty trucks.

GM people fantasize about building a more expensive sedan, a vehicle priced over $100,000 to compete with the Mercedes S and BMW 7, or even the successful Bentleys. That is not likely now; I doubt there is enough money or talent for GM to take on such a project.

Executives also talk about creating a smaller Cadillac for the U.S. market. In Europe BMW has the 1 series, which it will soon import here, and Mercedes also has a small car that it sells in Europe. Again, I question whether GM is currently up to this task.

GM also dreams of making Cadillac a global luxury brand. That, too, is a worthy goal, but the company has not had much success. The latest flop was an effort to turn a Saab into a Cadillac for the European market. GM executives have trouble understanding that a foreign Cadillac buyer wants something that says "Detroit," not "redone Saab."

It is not too late for Cadillac. Now all it has to do is maintain some traction until it has its new vehicles ready for the U.S. market.

Edited by NINETY EIGHT REGENCY
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More pissing and moaning. Negative, negative negative. Incredible crystal ball this guy has... "I predict" whent Motor Trend pretty much spells it out.

For a car guy, you'd think he'd get his facts about the STS right. Calling it a "stretched out CTS" is a bit ass backwards.

Luckily there's no line at the doofus window.

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Luckily there's no line at the doofus window.

Look in the mirror. Flint's article is correct, although nothing original.
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This piece reminds me of the in-depth article flintstone wrote on mercedes slipping in the U.S market: dropping below Cadillac in sales, piss-poor reliability, tripled warranty costs in 1 year, plus scraping it's rep paper thin (behind the tagline 'In a perfect world, there'd be a mercedes in every driveway) over everything from $25K hatchbacks, 4 or 5 SUVs (topped by the positively ANCIENT 'g-wagon') and a minivan, not to mention fielding a 4400 lb 2-seater. But not to worry, in his expert opinion, "it's not too late" for mercedes.

Or am I just dreaming of a leveled media treatment? :wink:

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Look in the mirror. Flint's article is correct, although nothing original.

Precisely the point. Nothing original. *Almost* anybody here could have read the same Motor Trend article and spewed it back for a Forbes article just like Flint just did. Why bother?

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I look at the sales figures for Cadillac against Lexus and I figure Cadillac is doing pretty good. Lexus has EIGHT models (LS, GS, ES, IS, SC, LX, GX and RX) not even counting three Hybrids. Cadillac only has six (CTS, SRX, STS, DTS, XLR and Escalade). If Cadillac has a larger portfolio, they would probably be closer or ahead of Lexus.

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As long as Caddy keeps pushing forward it won't need to worry about things.

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What Flint says is true, but nothing "new." It's really a shame to read that the new large sedan replacement for the DTS/STS models will take four more years--and even the CTC three! How about one year for the CTC (Coupe), two for a CTC Cabriolet (Convertible), and three for the CTW (Wagon)--then the market would keep expanding. The new large sedan really needs to be a "homerun," just as the second generation CTS had to be one. Cadillac has a great history, so hopefully that will inspire the current designers to build outstanding products, restoring the marque's lustre!

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excuse me... how is lexus leading in luxury... must be speaking of that soft plastic that one in a million care about...

cause last i checked... cadillac had stabilitrac, onstar, cooled and heated seats, ipod connections, some even have blue tooth, what about vvt or direct injection? perhaps i missed the rainsense? or the LS7? okay maybe it cant park itself... but with onstar verbal directions, how could you miss your destination...?

luxury... what about the escalade? the icon of luxury when speaking of SUV's

push start ignition... 12 way power seats?

i know they werent speaking about the state of the art dual stage air bags... and the side curtain air bags...

hell they even have heated and cooled cup holders on the technology board...

and about that cruise control with the distance monitor...?

wonder if these guys ever compare vehicles prior to saying they suck or they are so great...

my impressions... riding in a friends decked out STS... i feel this incredible desire, once i sit in the seat...

the Lexus LS i rode in once... i was afraid to touch stuff... didnt want to f@#k it up... didnt have that fear when i was in the cadillac... the cadillac had better controls, more agility, more comfortable seats, a smoother ride, a more agressive motor smoother accelorating, and the GPS was very helpfull... almost as good as the SL55 my other friend has... but for being a 45k vehicle vrs a 130k... things are expected

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it has taken GM too long to restore Cadillac as a player in the "high-baller" luxo market [from E-class all the way up to S55 AMG]. Cadillac's portfolio of "rich" cars is not in place. Instead we have a second- tier marque with one hugely succefful model, Escalade, and a bunch of outdated cars. STS looks five years old, SRX is this much short of being a huge seller, XLR could just use another attention getting design, Escalade is fine, and Cadillac needs luxury coueps and verts. But nobody listens, I've been saying this for years, and nobody got the memo. Instead of spending money on redundant crap like say oh a Silverado SS along with a Sierra Denali, or a four minivans that are the same car, or now four crossovers that are essentially the same car and will appeal to similar crowds, instead of spending all this money on marketing redundant cars, how about entering markets you are nowhere near appealing to. Like the real luxury market, that soon everybody will have a piece of the pie, and Cadillac and GM will be left wondering what happened; I got the headling for ya ten years too late

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No.... he's still very very wrong.... it's mostly a bunch of spew.

As part of this plan, Cadillac will eventually phase out its big front-drive DTS sedan, formerly called the Deville, as well as its STS rear-drive sedan. In about four years, it will replace those two cars with a new rear-drive sedan. My talks with Cadillac officials seem to confirm this timetable.
So what you're saying is Cadillac's transformation is still not yet complete, Cadillac has confirmed such a fact for you, yet you're judging Cadillac's fate now...... right...
Management lost the desire to keep Cadillac design and technology ahead of others. Even today, some complain that the interiors in the big Cadillac sedans look dated and frumpy compared with those of their Japanese and German rivals.

Night vision, magnetic ride control, lane departure warnings, LED tail lamps, backup assist, Traffic NAV, heated washer fluid, automatic highbeams, remote start, keyless start...

and what does the interior's looks have to do with technology? Some of you may not like the look of the interior of my '04 CTS, but it is one of the most ergonomic interiors I've been in other than an Aurora. Sure that G35 interior might look snappy<to some>... but why the hell are the NAV controls tilted up and away from me? How usable is that!??

The drawback: Front drive is less desirable in performance vehicles and big luxury cars.
You mean like the Lexus ES? Woops!

And which Cadillac performance vehicle is FWD?

If management has any sense, it will deliver a vehicle that is the equivalent of a Mercedes E Class:

I certainly hope not. My Cadillac dealer is nice and all. Sends me a christmas card every year. However, I'd rather not be grabbing a burger with him every week while my Cadillac E-Class is in for warranty work.

Furthermore, the CTS is already E-class sized. Just because it's priced lower doesn't mean it can't compete on content or competence.

The Cadillac STS sedan is a stretched-out version of the smaller CTS. It was an effort to build a rear-drive sedan to compete with the BMW 5 series, but it did not match expectations. Its looks are not exactly sensational, and frankly, it is a bit small for what it was supposed to be.

:banghead: :banghead: The CTS is within 1/10th of one inch in both wheel base and over all length of the 5-series...... The STS's wheelbase is 116in compared to the 7-series 117.....The over all length of the STS is 196 v. 198 on the 7-series and 191 for the 5-series. With of the STS and 5-series is 72 inches.

So you're saying that the nearly 7-series sized STS... with an equal width and a full 5 inches in length on the 5-series is too small to compete with the 5-series?

Even so, it is reasonable to believe that the market will shift away from such fuel-thirsty trucks.

But wait! There's more! Escalade Hybrid.

Cadillac's XLR two-seater, built off Chevrolet Corvette underpinnings, is no home run either, with only 1,165 sales in seven months.

How's that Lexus SC doin there?
Executives also talk about creating a smaller Cadillac for the U.S. market. In Europe BMW has the 1 series, which it will soon import here, and Mercedes also has a small car that it sells in Europe. Again, I question whether GM is currently up to this task.

GM also dreams of making Cadillac a global luxury brand. That, too, is a worthy goal, but the company has not had much success

The baby Caddy won't compete with the 1-series, it will compete with the 3-series as the CTS heads up market.

Edited by Oldsmoboi
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Seriously can someone remove the 2 foot long stick from his @$$???

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They just updated it, remember?

Posted Image

Personally I don't agree with the statement the STS looks 5 years old. You can argue it looks too much like the current (not '08) CTS but it certainly doesn't look old. It's really one thing you can say confidently about the last 3 generations of STS - the designs are timeless.

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in person, the car looks outdated in the context of equally old Japanese and European designs

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in person, the car looks outdated in the context of equally old Japanese and European designs

Uh... what?

Posted ImagePosted ImagePosted Image

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in person, the car looks outdated in the context of equally old Japanese and European designs

I don't agree. Look at the '92-97 generation. Nothing from the Japs or Europeans matches the lines. I had someone ask me last year if I got a new car when they saw my '97. No one is going to say that about a 10 year old Audi or Toyota.

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isnt the XLR an extremely low production car anyway. Cadillacs line needs a refresh, and its staring with the 08 CTS.

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Who ever wrote this thinks they now it all. Sounds like a idot to me. Caddy is doing just fine.

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Uh... what?

Posted ImagePosted ImagePosted Image

new gen 5-series came out the same year as the current STS. new gen A6 came out the year before or the same year. M45 came out the same year. Maybe you are misinterpreting what I said? I meant in the context of thhe same year designs, STS looks the least fresh, in my eyes.

And by the way, did anybody get the memo, Caddy is doing fine. just see the post above.

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One of the postive aspects of having Cadillac sales numbers on the decline is not everyone has one - it's more unique on the road. I've never been one to follow the cattle crowd and driving a Caddy proves it. :)

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The Cadillac car line-up is not strong. And he's right.

The STS and DTS are not what they should be.

The styling is dull. The interiors are nowhere near what they should be.

Why is Cadillac so slow in getting this right?...so frustrating for a Cadillac

fan like me.

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The Cadillac car line-up is not strong. And he's right.

The STS and DTS are not what they should be.

The styling is dull. The interiors are nowhere near what they should be.

Why is Cadillac so slow in getting this right?...so frustrating for a Cadillac

fan like me.

I suggest you check out the current SRX interior and the '08 CTS interior. You'll find the current interior designs to be quite competitive.

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I am not trying to justify anybody's decisions, but I gotta think that it must be pretty damned hard to predict where the market is going to be in a couple years, considering how fickle the public is, how quickly styles change and how fast technology is changing.

Why I am pointing this out, is that when Cadillac dominated the market, it only had Lincoln (and maybe) Imperial to deal with. M-B and BMW were funny cars to look at. Not only that, but if you look at styling and technology trends throughout the '50s and '60s, not too much changed from one year to the next. There was a time when 'high end' features like a/c and power windows differentiated a luxury car from a more pedestrian family sedan.

Now, GM has to figure out where the market will be in two or three years AND juggle - what, 10,12 luxury brands? Not to mention a jaded press that has already sold itself over to the imports. I personally don't care about the high end market. I can't afford them, and even if I could, I wouldn't spend $70k on a car that will be obsolete AND lose $35k in its first two or three years of existence. I would rather invest in a 40 year old luxury cruiser that will go up in value, not down.

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I am not trying to justify anybody's decisions, but I gotta think that it must be pretty damned hard to predict where the market is going to be in a couple years, considering how fickle the public is, how quickly styles change and how fast technology is changing.

Why I am pointing this out, is that when Cadillac dominated the market, it only had Lincoln (and maybe) Imperial to deal with. M-B and BMW were funny cars to look at. Not only that, but if you look at styling and technology trends throughout the '50s and '60s, not too much changed from one year to the next. There was a time when 'high end' features like a/c and power windows differentiated a luxury car from a more pedestrian family sedan.

Now, GM has to figure out where the market will be in two or three years AND juggle - what, 10,12 luxury brands? Not to mention a jaded press that has already sold itself over to the imports. I personally don't care about the high end market. I can't afford them, and even if I could, I wouldn't spend $70k on a car that will be obsolete AND lose $35k in its first two or three years of existence. I would rather invest in a 40 year old luxury cruiser that will go up in value, not down.

that's why they hire so many designers and analysts to predict the trends. it's why they have designers who are supposed to be on the forefront of the fashion and design industries. a lot of their designers from overseas markets seem to get it, and have for some time now. it's the GMNA designs that have been consistently disappointing on one front or another.

to elaborate on my position, a lot of the GM cars have character that is great, this tends to come from the history of the line or that particular model; however the execution and the overall look of the cars is yesteryear....one need to look no further than the halo car, the Corvette to see what I'm saying.....barely three years into that models' intro and it's already starting to look dated. [flame suit on]

the positives of the current STS in my eyes are that it's an elegant car that is distinctive and has some Caddy character. The bad is that the lines have been so dulled it might as well be a current gen Camry with big vertical lights slapped on each side and a big grille.

I too liked the last gen STS look, it was very timeless and Euro....but it would have been at home at Chevy or Buick too

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