Cadillac hopes to get back on track with new models
Consumer perception key to brand turnaround
DETROIT – Cadillac loyalist Daniel Bobowski is one of the brand’s biggest challenges.
Bobowski has owned several Cadillacs since 2006. He likes his current 2013 CTS coupe, but he’s reluctant to trade it for a newer Cadillac — and has considered a Lincoln instead.
The styling of new Cadillac models doesn’t appeal to him, and the cars are too high-priced for what Bobowski believes is lower quality, even the brand’s sporty compact. “I looked at the ATS, and it didn’t seem sturdy,” Bobowski said. “I didn’t like it. It didn’t drive like a Cadillac should drive.”
Cadillac’s new boss, Steve Carlisle, must change the perceptions of consumers such as Bobowski if Cadillac is to better compete against other luxury offerings, especially those of the bigselling European brands. Carlisle has a tall to-do list, but dealers and industry analysts say his first task is to push for better vehicle quality than what General Motors’ luxury brand has delivered in recent years.
“There’s no excuse to not be at the top of the pack in vehicle quality these days,” said Maryann Keller, principal of New York-area auto industry analyst firm Maryann Keller & Associates. “If the product isn’t as good as or better than the brand they purport to com- pete against, they have no chance.”
❚ Quality improving: Cadillac ranked 27th out 31 brands in the J.D. Power 2018 U.S. Vehicle Dependability Study released this year. It topped only Jeep, Fiat, Land Rover and Chrysler. The study measures the number of problems per 100 vehicles original owners experienced during the past 12 months of 2015 model year cars.
The quality on Cadillac’s newer models has improved, dealers said, but consumer perception is unmoved, many analysts say.
GM in April abruptly replaced fouryear Cadillac chief Johan de Nysschen, who was leading a $12 billion overhaul known as Project Pinnacle designed to help Cadillac compete in the luxury
market globally.
Beyond improving quality, Carlisle, who took over as Cadillac’s chief in April, also must better define Cadillac’s identity, boost its marketing, price its new SUVs slightly below competitors to catch up with the European luxury automakers’ big sales in that segment and embrace Cadillac as GM’s showcase for debuting new vehicle technology, analysts said.
But for most car shoppers, reliability and safety are the top factors in a purchase, said Akshay Anand, executive analyst with Kelley Blue Book.
“They’re table stakes, so if a brand isn’t perceived well in either or both, it’s going to be tough sledding,” Anand said.
❚ New product on way: Cadillac has made recent sales strides. Through the end of the first quarter, Cadillac’s new vehicle fleet and retail sales increased
8.1% in the U.S. compared to a year ago, according to Kelley Blue Book Sales and Data Report. In fact, it’s topping sales gains by German rivals BMW and Mercedes Benz, aided by the strong-selling XT5, a midsized SUV. Cadillac launched the XT5 about two years ago. It competes with the Lincoln MKX, Audi Q5 and BMW X5.
Cadillac will launch the smaller
2019 XT4 compact SUV this fall. Industry experts said the XT4 is smartly priced, starting at about $35,000. Cadillac will roll out the 2020 XT6 large SUV in 2019.
Still, Cadillac is in “an odd spot right now,” Anand said. “Its brand transformation isn’t complete, yet traditional owners may not recognize the brand and some of its reshaped products.”
Kelley Blue Book tracks perceptions from in-market consumers, and Cadillac rates as average to below average on every factor car shoppers consider, Anand said. It’s a problem that worries some Cadillac dealers, who have addressed vehicle quality issues such as faulty transmissions and glitches in technology over the past three years, they said.
Carl Sewell, chairman of Sewell Automotive Companies in Dallas, said Carlisle “needs a firm commitment from GM that Cadillac vehicles will be built to the German luxury standard.” His group sells a total of 40,000 new and used vehicles a year at 17 dealerships across Texas, four of which sell Cadillac.
❚ Accelerating success: GM declined to make Carlisle available to comment for this story, but Cadillac spokesman Andrew Lipman wrote in an email: “We are staying the course with our 10-year strategy that we put into place a few years ago. If anything, Steve will be looking at ways to accelerate that strategy.”
The plan includes developing new vehicles, such as the upcoming line of SUVs. Cadillac’s vehicles also showcase GM’s new technology, such as Super Cruise for hands-free driving.
“We have the XT4 launching this fall, and from there, we have a new vehicle coming every six months,” Lipman said.
Cadillac has time to convince Bobowski to stick with the brand. His CTS has 25,000 miles on it, so he plans to keep it another year or two. But he reads car enthusiast publications and tracks Cadillac’s quality and styling.
“I want something that would make me turn my head, and Lincoln does that a little with their MKZ.” But, he added, “Obviously, quality and dependability are important, too. You expect a certain level of quality for what you pay.”