gavriil

This I dont get. Can Chinese people afford the CTS? I just cannot imagine that yet. In any case, here is the news:

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Reuters / June 11, 2003

DETROIT -- General Motors will export its Cadillac CTS to China within a year, and if sales are favorable the automaker could begin manufacturing the luxury sedan there, a senior GM executive said Wednesday.

"We're going to launch the car and see how volume progresses," Fritz Henderson, president of GM Asia-Pacific, told Reuters before a presentation to reporters.

Henderson noted that German luxury automaker BMW AG will begin manufacturing cars in China this year, and he said there has been speculation that DaimlerChrysler AG could also assemble Mercedes vehicles there.

"I wouldn't rule it out," he added when asked about local production of Cadillacs.

He said he expected initial sales for the CTS to run at an annual rate of about 1,000.

China is one of the few overseas markets where GM plans to sell a number of different brands. GM already builds Buicks and Chevrolets in China, and also plans to export Saabs there. He said there are no plans to assemble Saab vehicles in China.

GM expects sales of cars and light trucks in China to grow by more than 3 million units by 2012, the largest growth of any country in the world.

Henderson said GM will not hesitate to add capacity to keep pace with growth in China. "We will put the capacity in, hopefully well in advance of today's market," he said.

GM's market share in China slipped to 6.8 percent in the first quarter from 7.8 percent last year, due to some quality problems with the Buick Regal, Henderson said. But GM has fixed the problems with a supplier, and expects to boost its market share, he added.

The growth of China's automotive market allows the country to become a source of automotive parts for vehicles assembled back in North America, Henderson said. Some vehicles that are planned for launch in 2005 and 2006 will use some parts from China, he added.

gavriil

Export Saabs there? What has the world come to. Good for them, if they can sell them. But...can they?

Zoot

Buicks are very popular there...it's strange

Red Nj-s

Good for the Chineese people if they are moving away from being socialist, but last time I checked, i don't think they can afford Cadi's.

gavriil

The 90 days that shaped Cadillac: How a $4 billion bet was placed on brand's future


By DAVE GUILFORD | Automotive News

In February 1998, the Cadillac brand was in a coma, and General Motors' top executives knew it. They gathered in suburban Detroit to see chief designer Wayne Cherry's bold sketches for Cadillac vehicles -- a look some critics later called downright ugly. But before they would vote to place a $4 billion bet on Cherry's design, they game him 90 days to perfect a 3-D model.

When General Motors' top executives gathered Feb. 3, 1998, to view design chief Wayne Cherry's new look for Cadillac, they were ready to gamble.

Inside the Design Dome at GM's Warren, Mich., technical center, 20-foot-long boards displayed dramatic sketches of an entry-luxury vehicle with a creased, slab-sided, sharply angular look. Then the executives viewed the alternative - a conservatively styled replacement for the lackluster Cadillac Catera.

"They completely rejected it," recalls John Smith, then Cadillac's general manager. "They looked at Wayne and said, 'You have 90 days to bring us the vehicle that you showed us in the dome this morning.' "








Skeptics had a field day when Cadillac floated a new angular look. Top: Sketches and models of the Evoq, the first concept with the theme. Above, a technician in GM's design studio works on a scale model of the Evoq before the concept was unveiled at the 1999 Detroit auto show.
Over the next three months, the members of GM's North American Strategy Board would be asked to bet that this risky new look could revive Cadillac.

Much more than a simple vehicle design was at stake. The board would have to spend $4 billion to bring Cherry's design to fruition. It would require a new rear-wheel-drive architecture, a new assembly plant and a new product lineup. Most important, it would require GM to break out of its bureaucratic slumber.

Cherry, criticized for dull designs in the 1990s, was eager to sell his radical new styling. To do so, he had teamed with John Smith to propose the sweeping changes.

President Rick Wagoner and the rest of the strategy board - GM's top decision makers in North America - were deeply worried that GM would miss the U.S. market's coming surge in luxury sales. Cadillac's geriatric image had to change.

Cherry's sketches challenged GM's executives to take the kind of risk that they usually avoided. But now Wagoner was willing to take a chance on the design. "It was clearly one that challenged people," Wagoner says. "While it was sort of shocking in its boldness, it was, upon reflection, something that fit. It felt right."

The board's 90-day deadline was the kind of challenge that Cherry - a workaholic even by GM standards - relished. He delegated his administrative workload and handpicked his design team. Cadillac's future was at stake. He had just three months to get it right.

Worry over Cadillac

The effort to transform Cadillac had begun a year earlier.

As much as GM's leadership wanted change, it would not commit lightly to a project that, in finance guy Wagoner's words, "ate up a lot of capital."

That's where John Smith came in.

GM's brass had summoned Smith to Cadillac a year earlier from his post as president of GM's Allison Transmission subsidiary. Smith found GM's top executives - CEO Jack Smith, Wagoner (then president) and GM North America President Ron Zarrella - deeply concerned about Cadillac.

"When I got there, it was clear, having talked not just to Ron but Jack and Rick and others, that they really wanted to figure Cadillac out," John Smith says.

GM executives desperately needed a strong luxury brand. But Cadillac was on the wrong side of shifting luxury-market demographics. Industry analysts were excited by the prospect of soaring sales of luxury vehicles to baby boomers entering their peak earning years.

But GM was saddled with a luxury brand that few baby boomers would even consider.

Sales of Cadillacs had declined sharply from their peak of 350,813 in 1978. Cadillac sold 182,570 vehicles in the United States in 1998, to rank second in U.S. luxury-brand sales behind Lincoln.

More significantly, Cadillac's sales were virtually flat from the prior year. Meanwhile, import brands were gaining rapidly. Lexus, for instance, sold 156,260 units in 1998, up 60 percent from 1997.

By 2000, Cadillac would place fifth among luxury makes. The brand's average buyer was 65, and baby boomers particularly were turned off by Cadillac's staid image. Cadillac's demographics had become a serious liability.

"It was all designed for blue-hairs," says Paul Haelterman, director of market assessment at CSM International in Northville, Mich. "They clearly recognized it and started to position the company to deal with that."

John Smith's timing was good in one key respect. GM had spent the previous five years under Jack Smith (no relation to John) pulling itself back from the brink of bankruptcy.

GM's first product splurge had been to reinvigorate its highly profitable full-sized trucks. Now it was ready to invest in another high-margin project with growth potential. Cadillac fit the bill.

John Smith's predecessor, John Grettenberger, says GM's financial bind in the early and mid-1990s prevented Cadillac from attacking its problems. Deeply shaken by losing nearly $5 billion in 1991 and another $2.6 billion in 1992, GM's board had forced out CEO Robert Stempel and embarked on stringent cost cutting.

"In that time frame, the corporation was just hemorrhaging money," Grettenberger says. "Things had to wait until the profit picture turned around."

Money crunch aside, Grettenberger's efforts to expand Cadillac's lineup bumped up against the brand-management orthodoxy reigning at GM.

Cadillac lost its opportunity to be first to market with a luxury SUV in the mid-1990s, Grettenberger says. North America chief Zarrella rejected the proposal, leaving the field open for the Mercedes-Benz M class and Lincoln Navigator. "My friend Ron Zarrella felt that GMC and Chevrolet could do well for GM in the SUV business and basically killed it," Grettenberger says. "In retrospect, it wasn't one of his best decisions."

Dinner with Zarrella

Early in 1997, John Smith found himself sitting across a dinner table from Zarrella at the posh Townsend Hotel in Birmingham, a Detroit suburb, to discuss the job at Cadillac. Zarrella may have blocked the Cadillac SUV, but Smith would find him a strong ally in rebuilding the division.

Smith recalls a lengthy, wide-ranging discussion. (Zarrella, now CEO of Bausch & Lomb Inc. in Rochester, N.Y., did not respond to several interview requests.)

Smith argued that GM needed a strong Cadillac because the public perceived it as "the best GM can do."

"If it can be competitive again with the noble marques, it will cast a very favorable shadow over the whole portfolio," he told Zarrella.

Smith added another goal. To be successful, Cadillac needed to sell vehicles globally. Its annual volume in the 200,000-unit range, with paltry sales outside North America, was a disadvantage when doing battle with BMW and Mercedes-Benz.

"Those guys were 600,000, 700,000 units a year globally," Smith says. "Some of that number were taxi cabs, but they still had that volume that was driving their total profitability. It was driving cash, it was driving the ability to reinvest in additional products."

Smith's remarks struck a chord with Zarrella. Smith became vice president and general manager of Cadillac in February 1997.

John Smith came into the job with strong allies. He had worked at GM Europe with Wagoner and Jack Smith.

Cadillac dealer John Bergstrom, chairman of the Bergstrom Corp. dealership group in Neenah, Wis., says John Smith was given broad freedom to reshape Cadillac.

"Jack Smith and Rick said, 'We'll get you the money, but you've gotta bring this whole thing around to be a crown jewel,' " Bergstrom says.

Getting Escalade

When John Smith arrived at Cadillac in 1997, the SUV issue still was simmering. The Mercedes-Benz M class and the Lincoln Navigator were winning the race to market. Archrival Lincoln's SUV particularly was galling; it would sell 26,831 units in seven months that year and 43,859 in 1998.

Legendary Texas dealer Carl Sewell, then head of the Cadillac dealer council, says missing the luxury-SUV market infuriated dealers and soured relations with Zarrella.

"As head of the dealer council, I just had terrible arguments with Ron Zarrella," says Sewell, chairman of Sewell Automotive Cos. in Dallas. "Ron was not going to let Cadillac have a utility. He was adamantly opposed to that - and that is not secondhand knowledge."

But nine months after he arrived, John Smith had won approval for the first Escalade.

"The door was opened for us by Jack Smith," John Smith says. "He called me in August of '97. We were chit-chatting about a couple of different things, and at some point he asked me, 'Don't you think you need a truck?'

"I remember telling him, 'Yes, I think we need a truck, but not everyone between you and me thinks so.' He paused for a minute and said, 'I might be able to help on that.' "




Top: The Cadillac CTS concept. Above: Cadillac General Manager Mark LaNeve and Vice Chairman Robert Lutz show off the high-performance CTS-V in April 2003.
Dealer Bergstrom says the first Escalade was "a bridge" to Cadillac's revival and credits John Smith with a more active role than Smith himself describes.

"Everybody knows that John Smith literally stood on his desk and screamed, 'We need SUVs at Cadillac, and they need to be the best in the land,' " Bergstrom says.

The initial Escalade - a thinly disguised GMC Yukon Denali - didn't impress auto critics. But John Smith says it gave dealers hope. And it made lucrative profits for Cadillac in 1999, when it sold 23,897 units at a base price of $46,525.

Identity crisis

Winning the Escalade was a Band-Aid compared to Smith's bigger challenge. Cadillac - once a brand as bold as the outlandish tailfins on a 1959 Eldorado Seville - lacked a clear identity.

Cadillac's advertising was one symptom. In keeping with Zarrella-era practice, brand managers advertised individual vehicles in separate campaigns that minimized their connection to Cadillac.

The approach was an obvious dead end, Smith says.

"You can pretty quickly reach the conclusion that this strategy in toto will not work," he says. "There will never, ever be enough money for the individual brands (vehicle nameplates) to go out and create enough awareness for themselves. There will never be that kind of money. The center has to be strong, has to be meaningful, has to be a store of value."

The solution, Smith says, was to build "a clear, concise and compelling" identity for Cadillac. To do so, he turned to Cadillac's past. Smith pored over past marketing materials and prowled GM's Cadillac Museum, an anonymous-looking building in an office park near the technical center that GM has stuffed with classic models of the past.

Smith developed the theme Art & Science, referring to Cadillac's heritage of head-turning styling and sophisticated technology. For the "art" part of the formula, Smith enlisted Cherry.

Today, Cherry says the work to develop a design theme for Cadillac occurred at a sweet spot in corporate history. Designers' ever-present urge to push the boundaries coincided with a corporate need for dramatic change.

"There was a push and a pull," Cherry recalls. "That's when you can really make something happen."

'Severe, crisp, sheer'

One defining moment came when John Smith, Zarrella and Cherry spent a day in 1997 visiting motorcycle manufacturer Harley-Davidson in Milwaukee.

They were impressed by Harley-Davidson's ability to restore an iconic American brand. But Smith says the visit had two lessons: "One, it can be done. Two, we can't do it the same way."

Cadillac couldn't trade on its 1960s-era image because, unlike Harley-Davidson, it represented the Establishment.

"Harley-Davidson could keep people in Easy Rider mode for three or four decades," he says. "But establishing a spiritual stake in the ground with the '60s wasn't going to work. That was not a particularly kind decade for Cadillac."

Cherry wasn't looking to recreate the past, anyway. He pushed his designers for a high-tech interpretation of traditional luxury cues.

"If you look back through the history of the automobile, premium brands - and even a lot of Cadillacs - would develop very sheer surfaces with these nice creases on them," Cherry says. He recalls that former GM design head Bill Mitchell used to talk about "the crease in the trousers."

But Cherry didn't want cars that evoked a 1950s gray flannel suit, however sharply pressed. He pushed for "this more severe, crisp, sheer look to it - more computer-derived styling," he says.

That was the look that Cherry put up in full-sized renderings on the walls of the Design Dome. And that was the look that, following the February 1998 strategy board meeting, he converted into a full-sized, three-dimensional prototype of today's CTS within 90 days.

Design was central

The Art & Science plan embodied more than design. John Smith wanted to move most of the Cadillac lineup to rwd, which allows the performance and handling craved by younger premium buyers. Designers take advantage of the distinctive proportions of rwd cars, with the longitudinally mounted transmission, to sculpt the longer hood of classic luxury cars.

Beyond that, Smith proposed a new dealership design. And Cadillac, never a strong global player, would develop a strategy to sell vehicles in Europe and Asia.

Overall, "Art & Science" had a hefty price tag. GM would pay billions for the new vehicle architecture, the development of new vehicles with top-end componentry, a new plant, subsidies for new dealerships, and the overseas sales push.

"The number that's been thrown around was $4 billion, and that's pretty close," Wagoner says. "It was a massive commitment."

Still, it all hinged on design. Without standout vehicles that excited buyers, the other measures would be futile.

That put enormous pressure on Cherry. Smith says Cherry "broke all his own rules in design staff" in the 90-day sprint to build a prototype for the strategy board.

"He went into every studio - it didn't matter if it was Olds, Pontiac, Buick - found his very best people, brought them down to the Cadillac studio and said, 'All right, this is the job we have to do.' "

'Oh, jeez'

The team produced initial sketches and began winnowing them down. By March, it had a full-sized clay model of the future CTS.

"It amazes me when I go back and check the dates," Cherry says. "And by April we had a full-sized, see-through foam model."

In May, the strategy board gathered in a design studio in the technical center. Ever the showman, Cherry set up two large storyboards, then pulled them aside to reveal the car - the first foam model GM had done with working headlights and taillights.

"When we pulled off the cover, we got a round of applause," Cherry says. With a laugh, he adds, "That may have been for how fast we did it."

But the board's embrace of the new design theme was real, as evidenced by the current CTS. The foam model shown in May 1998, Smith says, "was the CTS in virtually the same form as what's on the street today."

Imre Molnar, dean of the College for Creative Studies in Detroit, says the Cadillac design was a striking break with the aerodynamic look that governed automotive styling in 1998.

"It was a really courageous step," Molnar says. "At the time, it was so refreshing because everyone was doing such soft stuff."


Ron Zarrella, president of GM North America, second from right, stood by the risky designs when customers had doubts at clinics. With him are the 2003 CTS and, from left, GM executives Tom Davis, Robert Lutz and John Devine.
In approving the new direction, the strategy board also was committing itself to the creation of a vehicle architecture, the Sigma, now used for the CTS entry-luxury sedan, the SRX sport wagon and next-generation STS full-sized sedan. And it meant building a factory, the Lansing Grand River plant, which opened in late 2001.

When the board approved the new design, the die was cast.

Wagoner recalls that the strategy board prodded Cherry not to compromise on the CTS. When the board saw the prototype in May, Wagoner recalls, "We said, 'Oh, jeez, they did what we asked. Now we're going to have to do it.' "

Going public

Next, John Smith lifted the curtain to allow the public a glimpse of Cadillac's plans.

In a May 1998 gathering of 100 Cadillac "master dealers" at Turnberry Isle Resort in Aventura, Fla., Smith gave a shorter version of his presentation to the strategy board. He noticed that "everybody was paying attention, even the dealer wives."

"The other thing I noticed was that there was a lot of activity in the back of the ballroom," Smith says. "What I discovered later was that I had about 25 minutes to do this and I took about an hour and 15. What they were doing in the back was re-racking the golf lunches and re-racking the golf tee times."

A more striking display was coming. Even as Cherry's group worked on the CTS prototype, he assigned another team to develop the Evoq concept roadster for the Detroit auto show, 11 months away in January 1999.

The Evoq alerted the public to Cadillac's intentions, although the slab-sided look was derided by many as chunky and ugly. In fact, the radical new design was beginning to scare some GM executives.

As the CTS went to consumer clinics, Cherry acknowledges, "People were somewhat shocked by the vehicle. To some extent, not totally, that's what we wanted."

John Smith moved in February 2000 to head GM's Service and Parts Operations in Grand Blanc, Mich., about 60 miles north of Detroit. He was replaced at Cadillac by Mike O'Malley, who had headed GM's North Central Region. As doubts swirled in GM executive suites, Zarrella called Smith.

"I had heard that the clinics weren't going so well, and Ron called me up and said, 'We're getting clinic feedback that's not very encouraging on the CTS. What do you think?' " Smith says.

"I said, 'I don't think we did clinics back in the '40s and '50s when Cadillac was kicking ass."

Smith and Cherry credit Zarrella with hanging tough.

"There were some on the strategy board who began to evidence eroding confidence in the Art & Science strategy - I would underscore the word 'some,' " Smith says.

"I give Ron a lot of credit for acting sort of like Henry Fonda in 12 Angry Men and saying, 'We've made this call, it is the right strategy for Cadillac, and we're sticking to it.' "

Sleepless nights

Wagoner acknowledges that consumer clinics were troubling. But he says GM's leadership felt that Cadillac couldn't succeed by imitating other brands.

"At that point, if you tried to position anything as a luxury car, it had to look like a BMW or a Mercedes or it wasn't considered," Wagoner says. "We said, 'That's exactly what we don't want to do.' The me-too strategy is not a good one."

But, Wagoner adds, "I'm sure there were plenty of sleepless nights amongst a lot of people."

The tension carried through the introduction of the CTS in late 2001. Many reviewers admired the vehicle's performance but remained cool toward the styling. A representative comment from Motor Trend: "The CTS certainly makes a bold statement, but we're still not sure what language it's speaking."

Today, the daring design has established itself in the marketplace.

The Escalade and CTS have pumped up the division's sales. The CTS is enjoying a strong second year with 34,078 units sold in the United States through August, making it Cadillac's second best selling nameplate after DeVille with 51,753 sales in the same period. And the Escalade has proved popular with athletes and rappers, bestowing an unaccustomed hipness on Cadillac.

The glitter is continuing this year, as Cadillac rolls out the Evoq-based XLR luxury roadster and the SRX sport wagon. A review in The New York Times said the XLR "compares well with the more-expensive Mercedes SL500."

Cadillac's struggle is far from complete. It sold 199,748 vehicles in the United States in 2002, 9.4 percent over 1998's figure. But import brands such as BMW, Lexus and Mercedes-Benz still outsell it.

And though the average age of a Cadillac buyer has dropped from 65 to 59, the division is just beginning to win consideration from luxury shoppers who prefer imports. Launching the next three vehicles - the SRX, XLR and STS - is critically important to solidify Cadillac's initial gains.

But Cadillac now gets some respect in the luxury market, a striking transformation for a brand that seemed headed for irrelevancy.

Automotive News Product Editor Rick Kranz contributed to this report

gavriil

gavriil

Cadillac gives itself mixed marks, says turnaround not complete


By DAVE GUILFORD | Automotive News


General Manager Marc LaNeve says Cadillac is not back yet.
DETROIT -- Mark LaNeve, Cadillac's marketing general manager, gives his division mixed grades for its turnaround.

"I think we've turned the corner," LaNeve says. "I think we're a far way from being back."

Competitors take a similar view. They admit that Cadillac has made progress in rebuilding credibility as a premium brand but say it has more work to do.

Speaking to USA Today in May, Tom Purves, CEO of BMW (US) Holding Corp., said Cadillac is the automotive brand he finds "the most interesting - it's not necessarily the most successful yet."

"I think it's interesting that they've gone about regenerating their position with some interesting styling and design ... If they do that, they will be one of the few car companies that came back," Purves said.

How has Cadillac performed in achieving its key goals?

Its new vehicles represent the most clear-cut success. The CTS, the first rear-wheel-drive car on the Sigma architecture, received praise for its performance. And it won over skeptics who initially reacted coolly to its sheer-edged design.

Those strengths - styling and performance - continue with the XLR luxury roadster and the SRX sport wagon rolling out this year. The three Escalade models have won Cadillac sales and cachet.

But other parts of the game plan developed in 1997 by then-general manager John Smith haven't come to fruition. The goal of winning conquest buyers from import rivals such as Lexus, Mercedes-Benz and BMW remains far off, according to Chris Denove, a partner at J.D. Power and Associates in Westlake Village, Calif.

J.D. Power research shows that 5 percent of luxury import buyers this year considered Cadillac - an increase from 3 percent in 2002. And 23 percent of Cadillac buyers had considered luxury imports, up from 13 percent last year. Despite the growth, both figures are low, Denove says: "There still isn't a lot of cross-shopping between Cadillac and the luxury imports."

Cadillac's biggest shortcoming is overseas sales.

In 2002, Cadillac sold about 225,000 vehicles worldwide, according to parent General Motors. But 199,748 of those sales came in the United States. Cadillac has contracted with Kroymans Corp., of Hilversum, Netherlands, to develop a dedicated dealership system in Europe. That effort follows abandonment of a 2001 plan to sell Cadillacs in European Saab dealerships.

Cadillac also plans to open 10 Chinese dealerships in the next year. But in Japan, GM has parted company with its distributor, Yanase, and is rebuilding sales efforts.

The XLR represents a key test for Cadillac's efforts to rebuild an exclusive image. If its $76,200 price finds acceptance, the division will be encouraged in proposals for an ultra-luxury vehicle. Cadillac's high-end pricing remains a work in progress.

Another element of Smith's plan - redesigning dealerships - is beginning to win acceptance. Cadillac spokesman Jeff Kuhlman says 150 dealers have committed to redesign their stores.

To analyst Doug Scott, senior vice president of Allison-Fisher International in Southfield, Mich., it all signifies that Cadillac has taken a first step. It has begun to "stop the outflow of luxury intenders" to imports, he says, but must continue to strengthen its performance.

"I think Cadillac has moved back on the radar," Scott says. "But having said that, does BMW think it's a near-term competitor? I doubt it."

Sarlacc

I would agree with this.

heyitsme

they've made changes, enough to notice, but not enough to buy yet. guess it all rests on the sts and dts now, hopefully they will be true luxury cars foremost and they won't have the exact interior of the srx/cts.

Sarlacc

We'll just have to wait for the new CTA interior Lutz ordered for next year. And take it from there.

cusdaddy

good read

kansaiwalker1

The new CTS represents Cadillac pretty well. The V8 and extreme styling has caught people's attention but the interior still needs a lot of work. We'll see in the future if Caddy can keep the sweet sweet sugar coming.

Red Nj-s

nice little story

Minch00

Could make a pretty good movie....kinda like "Tucker"....

gavriil

A Cadillac Cunningham? Lutz aiming to place Cadillac on top of luxury heap


By AUTOWEEK

The beginning of the ascent, according to Lutz, could be a car codenamed ULS, or Ultra Luxury Sedan. GM is looking at developing a big sedan that would come in three model ranges: a V8, a high-performance V8, and a V12. Lutz said prices would start around $80,000, moving up to $120,000 and, at the top, $300,000, where a salesman would come to your office to help you pick out the wood, leather and other options.

Lutz’s desire to create a world-class American supercar is no secret. Past projects include the ill-fated effort to build a V12-powered Cunningham C7 grand tourer, and last January’s Detroit show stopper, the 1000-hp V16-engined Cadillac Sixteen.

Lutz said he believes only Cadillac and Lexus are poised to continue to be true luxury brands. Because all Mercedes and BMWs must wear the luxury badge, customers are beginning to no longer associate true luxury with those brands, Lutz says. That’s why Mercedes had to invent Maybach, he notes.

In addition, Lutz says, only GM and Toyota can afford to spread the engineering costs for luxury cars across an entire range of vehicles.

Lutz foresees a rising Cadillac fighting it out with Lexus for high-end buyers—not in total sales, but in terms of cachet. Lutz says he’d be happy if Cadillac general manager Mark LaNeve never again had to talk about being the luxury car sales leader. Instead, Lutz wants LaNeve talking about selling the best luxury cars. —ROGER HART & WES RAYNAL

gavriil

"Lutz said he believes only Cadillac and Lexus are poised to continue to be true luxury brands. Because all Mercedes and BMWs must wear the luxury badge, customers are beginning to no longer associate true luxury with those brands, Lutz says. That’s why Mercedes had to invent Maybach, he notes."

I have to admit, he does have a point here... I mean think of the 1 Series from BMW. The A Class by Mercedes. Etc.

TypeSAddict

If anybody spends THREE HUNDRED THOUSAND DOLLARS on a Generic Motors car they need their head examined, I'm sorry.......:shakehd:

1SICKLEX

hE IS A genuis...

gavriil

Like the $63K VW Phaeton?

First of, it's not a GM car, it's a Cadillac. Unlike the BMWs and Mercedes brands which are "contaminating" their line-ups with small cars like the 1 series and the A class, etc.

If the offering supports and reflects the price, then what's the problem?

gavriil

Not sure if he is a genius though he is a very smart guy. You can see how much deeper of a perception he's got of the auto industry. I have to admit, I never thought about the above (Lexus and Cadillac), though when I read it, it made perfect sense. We'll see how the execution will go though.

Cadillac has fixed the car performance dynamics and it always did well in reliability and will only improve on both of those criteria. Now please fix the interior and fit and finish and you got something worth writing mom about.

TypeSAddict

300k > 63k BY A LOT!!!!!!!

heyitsme

Think its a little premature to be putting Lexus and Cadillac in the same sentence let alone saying cadillac will be one of the few to be a true luxury car company. They haven't demonstrated anything really advanced to date. The xlr is nice but its not superior to whats out and from the pics, the sts won't be either.

cusdaddy

If they are going to charge that much for a car, I'm sure it will be worth or close to worth the $$. GM has some of the best engineering talent in the industry and if they put their design and $$ towards a goal like this, they can achieve it.

gavriil

Whatever Cadillac is preparing that will be priced at $300K > VW Phaeton by a lot!

gavriil

Posts like these make me soooo happy. Cusdaddy, you said it chief!

TypeSAddict

Let's hope so, I guess I'm just skeptical. GM hasn't shown me anything to to calm my cynicism yet either so........I guess we just have to wait and see.

Infamous425

caddy's look nice on the outside but inside cant compare to any lexus (except maybe is300)

proaudio22

No way, the opposite. The insides are nice, the outsides are fugly as hell.

gavriil

On a different forum the poll question was:

Do you think that this sedan would change the buyer's perception on Cadillac?

57% voted YES

kansaiwalker1

Cadillac stills has a long way to go before they can start comparing themselves with Lexus, let alone passing both BMW and Mercedes.

Remember the old Cadillac Cavalier and the ill-fated Catera?

I admit they have made some good moves recently(CTS-V, Escalade) but it will take a few more years of CONSISTENT excellence to move them up the ladder of prestige.

kansaiwalker1

Oh yeah, the upcoming XLR will really give them a boost too as long as it is not an updated Allante.

SiGGy

I think Lutz needs to readup on Maybach...

The name "Maybach" comes from the last name of the founder of the company... and then also his son who ran it for awhile. Not to mention the company was started in the early 1900's.

If those are lutz's words he's an idiot. Kinda like when chrysler owned Lamborghini. And then Lutz if lutz said Chrysler created their name to give Chrysler some prestige. (as an example)

sheesh, what a dolt.

SiGGy

Yes, while a lot of companies have some of the best talent for a lot of things. The 'talent' doesn't always make the decisions. And higher ups, who sit on the boards of numerous companies make political decisions that are ridiculous.


my

gavriil

True but why look at the Catera days and not to the "new Cadillac" days. Those are the days of the CTS, the CTSV, the XLR the SRX!, etc. These are at the least, very good offerings. And from the looks of it, they will only get better. Yes they have to be consistent though I can disagree with Lutz when he names Lexus and Cadillac as the 2 that will remain true luxury makers. How can you take Mercedes as a true luxury maker when you see the Mercedes A Class? Same with BMW when we know we will get a 1 Series car which will compete with the Honda Civic? That's what Lutz means when he says what he said.

gavriil

It is not. Read some of the reviews please.

gavriil

Dave I think you missed his point. What Lutz is saying is:

Because Mercedes CHOSE (and in my opinion, HAD TO) enter into market segments for smaller cars (they have done that in Europe many years ago and it's coming here as well), the brand is losing the part of its identity which defines a true luxury maker. A true luxury maker cannot claim the A Class and the S Class and continue demanding from the public to perceive its name as a true luxury maker. Same with the 1 series from BMW and the A3 from Audi. That can be debated, but I think Lutz is correct in that respect. And this is not about SUVs (Porsche Cayenne), this is about low-priced cars (when the time comes for you to be able to buy a $18K mercedes, dont you think that, that hurts the brand from a luxury perspective?).

So now, if we accept that, Lutz is saying, Mercedes mgt saw that the brand name will face some challenges and might lose some of its tru luxury interpretation by the public. Let's go ahead and create an "extreme" luxury brand name. Maybach. They did a great job with the 2 offerings from Maybach and so they are in a way covered their butt on the luxury plainfield.

But Maybach is an extreme luxury maker for now and even if you dont agree with that term, they only have 2 cars which sell in limited quantities. Which means that from a profitability and volume perspective, Maybach is not really a highlight. From a brand perspective, absolutely, but it's not like they are bringing in zillions of dollars in profit. The cash cow is still the Mercedes cars.

So if you continue to see an influx of cheaper Mercedes (BMWs and Audis) enter the market, then you have a brand which used to be a true luxury model (Mercedes, BMW, Audi) and a brand which is a true luxury brand though it's lacking the "cash-cow" offerings. That's a problem right there, from a business perspective.

If the C Class and E Class are your cash cows, then why hurt the Mercedes name by offering an A Class? You either create a separate brand, like the SMART brand creation (although that one started on the opposite extreme of the Maybach brand) and continue there, or you stop contaminating the Mercedes/BMW/Audi name with lower priced offerings.

Mercedes, BMW and Audi realized 5 years ago that the only way for economies of scale to keep working is to enter the mass market segments. And that means entering the affordable vehicle segments. And that's fine. Though to continue naming those new offerings under their previously true luxury brand name, is dangerous.

BMW tried to avoid that exact same issue by buying Rover. Though it did not work and sold it and went back to plan B. Which was, "stick to the BMW name."

So Lutz is saying. If you want cheap, buy a Chevy, if you want luxury, buy a Cadillac. Now think of the A Class and the S Class as...what? A luxury barnd, or an affordable brand? And therein lies the problem.

In a way, it's the same challenge that Acura has been facing during the past 4 years. It has not convinced the market, it's a true luxury maker, though at the same time, it's not an affordable brand either. As the new Honda bosses have stated: Acura mislead and confused the market. Mercedes, BMW and Audi are almost trying to do that.

SiGGy

No I understood the point. But what Lutz said was false. Mercedes did not create the name... And it works against what he was saying.

If he had choosen his words differently, he wouldn't look foolish making statements which are false.

Your analogy is perfect. Too bad lutz did use those words

I don't completely respect people who change the truth to meet his or her needs while speaking.


To sum it up, Mercedes did nothing to create the mega luxury brand "Maybach". The name was established by the companys founder and the products they built.

The words he used should not have been said that way.

gavriil

Oh so your issue is how the name Maybach started. You're not saying anything about the point he tried to make, but you're saying his does not know his car history. Right?

SiGGy

correct!

There's a good history behind the name. I'm surpised he would have said that. Maybach was known for luxury prior to Mercedes. But you hashed it out perfectly in your prior post.

gavriil

OK I see now. Though I have to say that when Lutz said "Mercedes created Maybach" he meant it from a business standpoint not from a historical one.