Cadillac makes beautiful cars nobody buys
Americans want SUVs and Cadillac was slow off the mark
When General Motors recruited prominent auto executive Johan de Nysschen to lead Cadillac in 2014, he hoped for a cavalry of new sport utility vehicles to shore up the luxury brand’s weakest position.
As it awaited reinforcements, Cadillac soldiered on with a legion of widely praised sports sedans, the kind of beautifully engineered vehicles its German rivals would have been proud to call their own.
But now Cadillac finds itself overrun by German and Asian SUVs, and GM’s leaders have parted ways with the man once seen as the brand’s future. And America’s premier luxury car brand must reckon with an uncomfortable truth.
“Cadillac is just not selling what people want to buy today, especially in America,” said Karl Brauer, executive publisher of Kelley Blue Book.
GM had lured de Nysschen — the rare company outsider to lead a GM division — on the strength of his successful stint atop Audi of America. His first major act was to place physical and psychological distance between Cadillac and Detroit, moving Cadillac’s headquarters from Motown to Manhattan in 2015. One result was a brand showpiece — but not a sales showroom — called Cadillac House.
In New York, de Nysschen believed, Cadillac could attract top talent, take the pulse of consumer trends and woo the coastal buyers it had struggled to win over. He also outlined GM’s plans to invest $12 billion by 2020 to develop eight new Cadillac models, including the kind of crossover SUVs that had been conspicuously absent from its lineup.
“How is it possible that we have so few crossovers from this iconic American luxury brand?” de Nysschen said in an interview at the time. “The Germans have more than I can count on two hands.”
While GM is known for its expertise in SUVs and trucks, Cadillac has just one car-based SUV: the mid-size XT5, which merely replaced the defunct SRX.
Even as rival luxury brands have minted money with downsized SUVs, Cadillac only showed its inaugural compact crossover, the 2019 XT4, at the New York International Auto Show in March. And perhaps more puzzling, Cadillac’s greatest sport utility success story, the massive Escalade, is now being upstaged by Lincoln’s red-hot Navigator, whose style and lavish interior have impressed critics and buyers.
The result is that Cadillac, a brand that had begun to transform its stodgy, retiree-only image during GM’s post-bankruptcy comeback, is struggling. Cadillac’s annual domestic sales had rebounded above 180,000 in 2013, up from about 110,000 in the recession doldrums of 2009. But sales plunged to 156,000 by 2017, even as the German brands were soaring. In the closely watched luxury race, Mercedes rode its own SUV-heavy lineup to 337,236 sales in 2017, while BMW found 305,685 buyers, nipping Lexus’ 305,132.
Now, GM’s leadership has replaced the South African-born de Nysschen with Steve Carlisle, the president of GM Canada, who joined the company 36 years ago. In a statement, Dan Ammann, GM’s president said that de Nysschen had set “a stronger foundation” for Cadillac.
“Looking forward, the world is changing rapidly, and, beginning with the launch of the new XT4, it is paramount that we capitalize immediately on the opportunities that arise from this rate of change,” Ammann said.
That 2019 XT4 finally goes on sale this fall, priced from $35,790, and it will need to elbow its way through a crowded party of compact SUVs. A three-row XT6 is also in the works, but it will not arrive before 2020, according to George Peterson, president of AutoPacific, an automotive research firm. Peterson already counts some 38 small crossovers in the marketplace, ranging from $20,000 to more than $90,000, and said that count should soon reach 45.
“Cadillac is recognizing that it’s a crossover world, but they’ve been slow to get off the dime,” Peterson said. “They’ll be launching into the teeth of a hugely competitive battleground.”
Brauer, the Kelley Blue Book publisher, panned Cadillac’s move to New York as windowdressing. It might have made sense, he said, if the brand had set up design studios or engineering in New York, but those linchpins of auto creativity remained in Detroit. The change of address seemed a dubious sequel, Brauer said.