Tuesday, June 9, 2009

Don't Count Cadillac Out Yet

A friend tipped me to a pretty negative blog post about the Cadillac CTS Wagon, due to go on sale as a '10 model at the end of summer. It has been on sale in Europe, and Cadillac was going to bring it to the USA.

What started off in an email thread among friends really became a referendum on Cadillac and its role in the "GM Reinvention" world.

My friend wrote in the email thread, "I really, really wish GM would take Cadillac more in the direction of the Audis, Mercs, and BMWs of the world, but I think they are too afraid. And that's a shame, but I won't give up on them."

I submit that is Cadillac's answer to that wish:


Some see Cadillac's current position in the world market against the European luxo-sports lines half-empty, I see half-full. I think they are exactly aiming Caddy at the luxo-euros. This wagon is another example. Their halo car, the XLR, isn't a luxo-sedan, it is a two-seater, CLK and XJR in its sights (w/o BMWs Z8, you might ask them where they are, and wither Audi?).




And
they competed at LeMans for a few years in LMP1 (though perhaps w/o enough guts to continue to lose to Audi--as everyone else did). And on of the most notable concept cars in recent years, the Cien, was a supercar beast. Perhaps the only exception in the Caddy line is the DTS. But you just don't walk away from all the fleet-luxo and old-school US money market. You'd be just as crazy to tell Benz to stop making limos. OTOH, perhaps they should make those into Buicks and break clean with some of the old brand identity. I'll take your point about oldsters in the Caddy ranks and I'll posit that the problem isn't in GM marketing per se, but in the old dealer network for Caddy. They're doing the frontline marketing and it may be that's where the polyester-and-gold walks in the door. And salesmen tuned to that audience may not know how to pitch a bimmer-class car.

I think Jaguar had a similar problem; they're only just coming out from under that "old wool and lace" market (for their sedans).

Here's a like anecdote: when we bought our Jimmy Suburban from Moore Buick/GM in Los Gatos, the guy who served us was a Buick salesman. He talked to us more about the interior and ammenities than the seating and pulling capacity, though those criteria were the first things out of our mouth. Unlike when we went to the Santa Cruz Dodge dealer, where the trucks were across the street from the Nissans and VWs and Dodge cars. That guy could talk locking hubs all afternoon.

A Caddy dealer experience that is more like BMW may be what's needed. Because they do have the cars:



And let's not forget a young man named "Andy Pilgrim" and what he did for Cadillac for a couple years in the Speed GT Challenge. Beat the sox off my favorite driver, Randy Pobst who pedaled an RS6 around the same circuits.

As far as the suspension settings/choices, that may be the Old Dealer effect I mentioned above. You can't blame Caddy for the option boxes their customers check, or for building what people are buying. But back to the specifics of that blog. What Banovsky wrote is that Caddy is suffering from having customers that it doesn't want, so it shouldn't make cars for them. Instead, it should make cars for a different market and try to woo them. And this market shouldn't be performance luxury sedans but hybrids and diesels and brand-badged Volts. Oh, wait, they're doing all those.



Well, maybe. Turns out in this climate that all the cards haven't hit the table. GM may quit on the diesel for Cadillac in europe (a huuuge mistake, IMHO):

You can chip at Caddy; there's certainly a lot of grist for the mill. I just object to poor automotive journalism because it doesn't take a whole lot of effort to actually make some good points (as you can see here :^> ). Instead, Banovsky is just setting up straw men to knock them down, and wrap it in a snarky New Englander finger-and-tongue wag.

Just read his summary: "The CTS Wagon....has been borne from misguided market research."

Wrong. They're competing successfully with this car in Europe, it is made in the USA, we export it, and it is a platform that could be a Voltwagen or use the Chevy/Escalade hybrid electro-trans. What's not to like about that? If they only sell 30k in the USA this year (and Banovsky never sees one in a parking lot while he's antiquing) then remember this: Porsche sells fewer Cayennes than that in the USA and those sales are what kept Porsche in the black.

Further, if that market can be drummed up then we're poised to go, rather than saying, "Gee, when all those folk stopped buying LX500s and M-class Mercs, why didn't we have something in the wagon segment they're all flocking to now?" That's how you lead. You get your troops in the right spot prior to the assault. I don't think it is wrong at all. I think its pretty smart. And actually, Banovsky makes a pretty good case for it in his own writing, if you can just stick to the facts and pitch the "Yankee common sense".

3 comments:

Michael Banovsky said...

Thanks for the huge response post — you should have left it as a comment!

Starting from the top:

1) Cadillac is aiming at the Euro lux brands, which is the problem. I'm saying to build a better Cadillac for the customers they already have, not to go chasing down M-B, Audi, and BMW. Your friend may want to see Cadillac compete on the world stage, but with only 4,574 (http://www.gm.com/europe/corporate/sales/model/)Cadillacs sold in Europe in 2008, I doubt drivers across the pond are really waiting for a CTS Wagon.

2) Yes, the Cadillac dealer experience is sorely lacking. But that's got nothing to do with the product, right?

3) Cadillac should never race. Ever. Again, delusions of: "We can fight BMW!"

4) "Banovsky wrote is that Caddy is suffering from having customers that it doesn't want, so it shouldn't make cars for them. Instead, it should make cars for a different market and try to woo them." Close, but I was saying that Cadillac has customers its current marketing doesn't reach but should be making cars for them. I give Cadillac due credit for the range-extended electric, SRX, and — heck — CTS Coupe, 'cause coupes are what the brand is all about.

5) "Wrong. They're competing successfully with this car in Europe, it is made in the USA, we export it, and it is a platform that could be a Voltwagen or use the Chevy/Escalade hybrid electro-trans." Nope…Again, they sold only 1,166 CTSs in Europe last year, and GM expects the wagon to be chosen for 1 out of every 20 buyers…which is 5 per cent. That's 58 CTS Wagons at 2008 European sales rates (2009 will be even worse.) In America, they've sold 58,774 CTS models in 2008. Applying the 5 per cent rule again, and you get 2,938 CTS Wagons sold, optimistically, in 2009. Why would Cadillac develop the wagon for under 5,000 sales?

6) You point to Porsche as an example of how little sales are needed to turn a profit. In 2007, Porsche earned at least $15,000 of profit per car sold! (http://www.autocult.com.au/NewsDetail.aspx?id=886) Cadillac should be so lucky.

7) "Gee, when all those folk stopped buying LX500s and M-class Mercs, why didn't we have something in the wagon segment they're all flocking to now?" Those buyers are moving toward crossovers, like the SRX. Cadillac is also planning to downsize the next Escalade (great!), but wagon owners never would have considered the LX570 or M-Class in the first place. Nor will luxury SUV owners consider a Cadillac wagon when their lease is up.

8) Most of the conjecture about Northeastern people was purely for fun. I'm Canadian.

Cheers, M!

Derek Kreindler said...

You are probably the only Cadillac fan who knows who Randy Pobst is.

Gary Grant said...

MB - I take exception to a few things you've said - and I'm a guy who grew up as anti GM.

That said, I take HUGE exception to #3. Every manufacturer should race!

Oh yes, not sure if you missed it, but Caddy did quite well with the CTS thank you very much! The sports car abomination, not so much!