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William Maley

Cadillac News: Cadillac To Make Changes In China to Appeal to Younger Buyers

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That it is, but the E-class has only grown about 4 inches in length in the past 25 years.  The late 80s E-class was 187-188 inches long, a 1996 E-class has length of 189.4 and a 2016 model is 192.1.  Height is up an inch and width up 2 over 20 years.  Small growth

 

The 1991 S-class was 205.2 inches long, the 2016 is 206.5 inches long.  So it also grew slightly over time, it actually downsized in 2000, then went back up in 2007.

 

But look at a 1990 Civicor 3-series and compare it to today, it isn't even close.

What about everything else? 

 

C Class?

CLK? S? SL? ML? GL? GLK? CLS? And all of the wagon and coupe variations that go with all of those.. have those all only grown 4 inches in 25 years? I would wager good money that isn't the case.. 

 

ML/GLE(whatever you want to refer to it as):

1997: 180.6 inches long

2016: 189.1 inches long

 

GLK/GLC

2009(first year it was made): 178.2 inches long

2016: 183.3 inches long

Exactly. As I told him, MB has been doing the same thing. They just do it a little differently by creating all these offshoot variations to disguise that very fact.

GM is not going to any of the things SMK has brought up and with good reason. Because they know better than him.

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The Chinese seem to like extended length versions of smaller cars... but extending an ATS 3 inches does not make it CTS sized because it doesn't have the width. A CTS stretched 3 inches doesn't make it CT6 sized because it doesn't have the width. 

 

BMW makes extended length 5-series in China. 

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They can't make CT6 any bigger, or it will be bigger than an S-class and a CT8 won't be needed, and we know they want a CT8. 

Cadillac doesn't care how long the s-class is.

 

But they very well may wish to -coincidentally- exceed that length anyway- since it's not all that lengthy as it is.

A CT8 could be 215"-ish and leave plenty of room for the 204" CT6.

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But in the case of Impala, since it is Chevy's best sedan name, and longest running, why not make that the Camry/Accord fighter. Make Malibu a Corolla/Civic/Focus competitor. The Malibu nameplate has proven it can't win against the Camry and Accord, maybe it will have better luck against Civic. Cruze then becomes the Fiesta/Accent/Versa competition.

Wouldn't an Omega platform Chevy cost as much as a CTS? What is the point in that?

My guess for Cadillac is the ATS grows to 185 inches long, so a car at 180 can go in below it. CTS stays the same size it is. They can't make CT6 any bigger, or it will be bigger than an S-class and a CT8 won't be needed, and we know they want a CT8.

First let me say that if the Malibu beats the Accord, let alone the Camry, considering that the Malibu has the Impala selling in the numbers it does.. not to mention the Camaro, then Honda needs to pack it up and get the f@#k outta here like I want them to in the first place. The Malibu's numbers are about to rise.. the Impala will still do well.

And an Epsilon Impala can cost almost as much as a CTS or 5series. So what's your point? Besides I'm pretty sure GM can make an Omega Lite platform that will utilize some of the great aspects of the CT6 but not all

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But who buys all these sedans, especially large sedans?  Large sedans are a dying breed.  The sheeple want crossovers.   The CT6 will be a sales dud, so why make a CTS bigger and wider to make it more like a CT6?   Mid size and small cars still sell in both mainstream and luxury segments.  That is the space to play, and any carmaker could run a 4-5 crossover line up out there and probably sell all of them.  

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But who buys all these sedans, especially large sedans?  Large sedans are a dying breed.  The sheeple want crossovers.   The CT6 will be a sales dud, so why make a CTS bigger and wider to make it more like a CT6?   Mid size and small cars still sell in both mainstream and luxury segments.  That is the space to play, and any carmaker could run a 4-5 crossover line up out there and probably sell all of them.  

Higher priced large sedans at low volumes still make a lot of money. In fact they are often nearly as profitable as the Trucks. This is why all the automakers are investing in their luxury lines and all are offering larger sedans. Again these cars are also sold on a global basis so the volume is spread out around the world not dependent on just one market. 

Come on it is 2016 not get with what is going on today. 

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Cadillac's global sales aren't that good though.  The Audi A6 sells over 500,000 units a year world wide.  Cadillac's whole brand doesn't do that.  I am all for investing in global luxury cars, but Cadillac is nonexistent in Europe, and they sell like 75,000 cars a year in China, Audi sold 570,000 cars in China last year.  

 

But even the S-class which is the #1 selling large luxury car by far sells 80-100,000 units globally per year.  Cars like the 7-series and A8 sell closer to 40,000 units per year globally.   Lexus LS460 even less than that.   So the full size segment is not where it is at.  The mid-size and small segments are.

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(Another ghost sighting)

 

Anyways, I think the S-Class is largely regarded at the superlative in its class. Is it a sales success because of branding or is it because it is actually good.

 

Well the market research says the companies that build their brand succeed - by catering to their buyers needs.

 

The S-Class sells to wealthy people in the majority of the world that do not drive themselves. Which means who the hell cares about the driver's needs at that point? Okay benevolent benefactor. Good point.

 

And I'd say the S-Class AMG vs potential CT6-V is akin to a Challenger Hellcat vs a 5th GEN Camaro ZL1.

 

And there are real reasons to consider the S-Class - superior interior, more powa and more expensive. Actually probably double as expensive. But that's branding. That's what's called earning quality revenue. 

 

And I swear to all of you. Cadillac wants a piece of that kind of business. That's what they are building towards. But to get there they first have to build driver's cars combined as luxury cars before making that pinnacle shift. They have cleared that path.

 

But why not just give us what us non-paying non-existent customers want - a production Elmiraj realized as a CT8.... Which I'm sure would make such a huge wave even if they lost money on every single one sold.

 

Consider the loss as the initial capital outflow to build the brand. or re-build in this case. Which changes the formula.... But you get the point.

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^ Those are fine… IF mass market global sales numbers is your mission statement.

 

But that's not Cadillac's.

Is Cadillac's goal to post profit?  Cadillac should be producing more dollars of profit than Chevy.   That is what luxury brands are for.

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Yes: profit is the goal, profit drives all future development.

 

But no one outside of General Motors Accounting knows exactly what Cadillac's profit level is. Via ATPs, it's going up- that much we know.
I also loosely recall some official statement WRT the CTS wagon (IIRC), that Cadillac had to sell an absurdly low quantity to break even (which I believe they eclipsed).

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Cadillac's goal is profit at their own lower volume. They are not like Benz and BMW that have to sell all and be all as GM has Chevy and all the other divisions in their quiver. Lots of arrows to cover the same ground all doing different jobs for once. 

 

As for judging Cadillac today vs. where they are going you really need to get back to the time line of what it takes to bring new product to market and just when the folks in charge got here. What we have now is not where it is going. 

Also we need to remember what show cars really are and that they are not real production cars let alone done under the people in charge today. 

 

You can debate this all you like but we have yet to see the first real product or first real major changes under the present management.  They finally were given the time, money and autonomy to do what they need to do and we should grant them the time to show us what they will be doing. To pass judgment on them and the division a this point is impossibly short sighted. 

 

Cadillac went from standard of the world to equal with the world then sub standard of the world. We are now back to nearly equal ground but their full return is when they are the undisputed leader and that will give the ability to recapture their image.  

 

You can build the best car in the world but yet not be viewed as being it. You do need to build the best but you still have to earn that respect. 

 

At this point Cadillac is making gains and do have the right tools but they still have to earn it. The greatest asset is they don't hold the burden of being a Taxi in Johannesburg or a police car in Berlin let alone a base model for a family in Poland and an ultra luxury car in China. Yet they will net  50%+ more sales profits than all the GM car sales even at higher volumes. 

Edited by hyperv6

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Cadillac's current management did nothing at Infiniti, and while head of Audi USA, what did he really do?  They are selling the same Audi around the world, and Audi does worse in the USA than they do in Europe or China, and Audi has grown in the USA since Johan left.   And the current plan is to make a Cadillac Enclave, a Cadillac Terrain, and, a CT8 that won't sell.  That is the path to success?  

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^ Those are fine… IF mass market global sales numbers is your mission statement.

 

But that's not Cadillac's.

Not to mention he is constantly trying to compare MBs overall sales numbers with ONE GM company that has a mere fraction of models that MB has on top of the fact that the ONE company is not looking for volume sales (which he has been told at least million times up to this point). More cherry picking by SMK does not change that fact (go ahead and down vote that children).

Edited by surreal1272

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Wouldn't GM be better off if they were selling 300,000 Cadillac CTS per year (globally) at a $5,000 per car margin?   If you told any exec at GM would you rather sell 300,000 Cadillacs or 300,000 Malibus, 100% of them would take 300,000 Cadillacs and zero Malibus.  

 

This "Cadillac needs to limit volume to be exclusive" mentality is an excuse for poor sales.  Should they limit the Escalade to 15,000 units per year to keep it exclusive, and turn away another 15,000 people willing to spend $85,000 on their product?

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Cadillac wants volume sales. Plain and simple.

 

That's why they're supposedly bringing to market 12 all-new models within the next 5 years to fill all the niches.

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You are still equating "sell" with "sales volume".

A CT8 is not meant to be high volume, just as Cadillac isn't.

 

You would think with you and I repeating this at some point it would stick but?????

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Well, it's because Cadillac has no market presence, and cars like Mercedes S-Class coupe/convertibles and Bentley Continental GTs own that segment.

 

So CT8 will not have amazing, but I'd bet that Cadillac would love to reverse the situation in a heart beat, woudn't they.

 

And Cadillac isn't meant to be high volume, I agree. But their brass doesn't agree, and is largely copying Germans to go toe-to-toe against them in all the niche segments.

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Wouldn't GM be better off if they were selling 300,000 Cadillac CTS per year (globally) at a $5,000 per car margin?   If you told any exec at GM would you rather sell 300,000 Cadillacs or 300,000 Malibus, 100% of them would take 300,000 Cadillacs and zero Malibus.  

 

This "Cadillac needs to limit volume to be exclusive" mentality is an excuse for poor sales.  Should they limit the Escalade to 15,000 units per year to keep it exclusive, and turn away another 15,000 people willing to spend $85,000 on their product?

 

The idea of whoring out production selling a lot of at bargain prices to fill up the Walmart parking lots of America is no way to build an exclusive image. 

Porsche tried to build an image this way with the 924-944 and paid a large price for it till they wised up. 

Volume is great for Chevy at a value price but a expensive car needs to hold value and gain image volume does nothing for it. Even Benz learned this on the old 190. Sure they sold a lot of them but not as good in profits and the image suffered much. It was even a joke on Top Gear once. 

 

What is your next idea. We take a Malibu and make a Cadillac out of it and sell it cheap so we can say we sold 200K of them? 

I bet you though the Saab based Cadillac's in Europe also were a good idea? BTS or what ever they called it. 

 

What you want is a Cadillac POS because you can not grasp the global concept of building a low volume high profit  luxury brand .

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I am not saying make the CTS cheeper, I am saying sell 300,000 CTS per year and raise the base price $3,000 as well.  $60,000 ATP times 300,000 units = $18 billion in sales.  At a 10% margin that is $1.8 billion in profit.  That alone would represent 20% of GM's total net income for 2015. 

 

I think they should have given Cadillac $24 billion for new product, not $12B.  If Cadillac is #1 profit margin brand, it should get the most product.  There are plenty of people spending $40-50k (or more) on Explorers, pickups, Chevy Tahoes, Avalons/Maximas, etc.   Vehicles not from a luxury brand, but yet still cost $50k.  Cadillac should try to steal all those customers.  Why pay $47k for an Explorer when for $52 you could get a Cadillac SUV or CTS, it is just $20 more a month.  That could even be their billboard.

Edited by smk4565

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You are still equating "sell" with "sales volume".

A CT8 is not meant to be high volume, just as Cadillac isn't.

 

You would think with you and I repeating this at some point it would stick but?????

 

Suppose CT8 costs $500 million to develop, which is actually cheap for a car, but we'll assume most of the work was spent on CT6 or other GM product.   If they make $10,000 profit per CT8 sold (which is a strong number, but doable for a $100k car), they need to sell 50,000 cars just to break even.  If the car costs $1 billion or the profit margin is lower, it could be as many as 100,000 units  to break even.  

 

Let's split the difference and say 75,000 units is break even, they would need to sell 15,000 per year for a 6 year life cycle just to break even.  With only China and U.S. sales they could probably hit that, but at that low volume they aren't making any money.  They probably need more like 30,000 units a year to make money on the car.  The XLR was low volume, and how did that work out?  It lost money and got cancelled.  

 

Even Jaguar was thinking of ending the XJ or making the XJ a large crossover because sales have fallen.  

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So you mean to tell me that the CT6 is underpriced because they want to build a CT8 that the CT6 was supposed to be?!

 

The CT6 is the answer to a question no one asked, and the 2.0T model exists the same way that a 320i exists for the BMW 3 Series. Because they're paralyzed by catharsis. Hey, let's build a low volume, high margin brand, yet let's debut a penetration priced, high volume car, and only sell it in markets where we have guaranteed sales. Then let's risk the prestige of our brand, by sourcing part of the models for that car from a place of origin that devalues the entire premise for the brand to exist in the home market of the car.

 

And that customer buying the base model CT6 is better served by a higher trim, loaded XTS that is far more profitable. 

 

But I love the CT6 all the same, though I can see behind the viel and say it how it is. 

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Wouldn't GM be better off if they were selling 300,000 Cadillac CTS per year (globally) at a $5,000 per car margin?   If you told any exec at GM would you rather sell 300,000 Cadillacs or 300,000 Malibus, 100% of them would take 300,000 Cadillacs and zero Malibus.  

Well, you're wrong again. 300K CTSs is not what Cadillac as a brand is going for. As a whole, Cadillac would sit very nicely at 200-250K units annually. 300K of one series is NOT what they're looking for.

 

I am not saying make the CTS cheeper, I am saying sell 300,000 CTS per year and raise the base price $3,000 as well.

Cadillac just recently adjusted the CTS pricing/equipment level, and you think raising the price $3K and running the factory 24/7 is the answer. Wow.

 

The CT6 is the answer to a question no one asked, and the 2.0T model exists the same way that a 320i exists for the BMW 3 Series. 

320i is wretched. CT6 2.0T is not.
 

And that customer buying the base model CT6 is better served by a higher trim, loaded XTS that is far more profitable.

Not the same car and choice appeals to luxury buyers. I have no issue with the XTS getting phased out & the CT6 occupying that (general) spot in the catalog. It's a great move forward on many fronts.

Edited by balthazar
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