Anthony Posted January 12, 2015 Share Posted January 12, 2015 (edited) Bloomberg General Motors Co. (GM), working to revive its slumping Cadillac luxury brand, plans to spend $12 billion to develop eight new models by 2020 and two more in the next decade, the brand’s chief said. Cadillac will focus on the so-called crossover sport utility vehicle segment, Johan de Nysschen said today at the Detroit auto show. Cadillac currently has just one, the SRX, while rival BMW has five and Audi has three in its lineup. De Nysschen said GM will add three SUVs as part of the expansion. GM is spending on the brand to fund a new-car renaissance at Cadillac, whose U.S. sales fell 6.5 percent last year. The brand does about half of what rivals BMW AG and Mercedes-Benz sell in the U.S. Luxury SUVs is one area where Cadillac is lagging, de Nysschen said. Cadillac will add two SUVs below the size of the SRX and one above it. GM, based in Detroit, is also planning a large flagship car for Cadillac. There is no immediate plan for a new ELR, which is a plug-in hybrid that runs using an electric drive system similar to the Chevrolet Volt. Cadillac would also like an all-electric car, but nothing is planned yet. Cadillac is also planning a large, prestige sedan that will sit above the CT6 sedan, which goes on sale this year. Since the CT6 is close in size to a BMW 7-series, the future sedan should serve as a style showpiece for the brand, said Uwe Ellinghaus, chief marketing officer for Cadillac. Believe it or not, there's even more at the link above! Edited January 12, 2015 by Intrepidatious Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted January 12, 2015 Share Posted January 12, 2015 At least they are working on products the market actually wants Quote Link to comment Share on other sites More sharing options...
bzcat Posted January 12, 2015 Share Posted January 12, 2015 CT2 = Delta III sedan (Buick Verano twin... the new Cimarron!) CT3 = ATS CT5 = CTS CT6 = Omega XT2 = Gamma III SUV (Buick Encore twin) XT3 = Delta III SUV (Buick Envision twin) XT5 = SRX (which will be replaced by Epsilon III based model) XT6 = SRX with 3 rows of seats Quote Link to comment Share on other sites More sharing options...
rmc523 Posted January 13, 2015 Share Posted January 13, 2015 Is it just me or does it seem like every other day GM makes an announcement about pouring billions into Cadillac? And sheesh, I forgot about that terrible naming scheme.... I still don't see why the old system was that confusing 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted January 13, 2015 Share Posted January 13, 2015 Still no mention of upgrading dealerships or improving luxury features on existing models or making regular hybrids. They can't sell their largest most expensive sedan, so they're going to make 2 more even larger and more expensive? Bob Lutz would be proud. 1 Quote Link to comment Share on other sites More sharing options...
bzcat Posted January 13, 2015 Share Posted January 13, 2015 (edited) Is it just me or does it seem like every other day GM makes an announcement about pouring billions into Cadillac? And sheesh, I forgot about that terrible naming scheme.... I still don't see why the old system was that confusing Old system wasn't confusing if you limit yourself to sedans but lack of foresight (starting at CTS) means no room for downward expansion of model range. SRX is way out in the left field vs. ATS and CTS and GM couldn't trademark any more *RX names for additional CUV models. ELR also another WTF name. Edited January 13, 2015 by bzcat Quote Link to comment Share on other sites More sharing options...
nruggiero Posted January 13, 2015 Share Posted January 13, 2015 I'm quite confident we'll see GM go bankrupt again. Quote Link to comment Share on other sites More sharing options...
atomcat68 Posted January 13, 2015 Share Posted January 13, 2015 They probably did get this idea from Bob Lutz. Mary Barra probably called him up like this: Mary: Hello Bob, that Cadillac thing isn't going so well right now. Bob: spend 12 billion more right away. Add 2 sedans right away to the ones not selling now. Mary: we got a guy from Nissan who is doing that now, and he changed all the names to German sounding names and moved Cadillac to New York. Bob: Damn! I didn't think of that... Sounds like a reasonable man. Mary: What should we cut to finance this? Bob: Well, there is this shitty little car called Malibu. No one's going to buy it anyway take some money from that. And if you take some money from the pick up program we can make 2 Corvettes. Mary: We have two pickups- Bob: Great Caesers Ghost... you know the one from Rome not the one in the monkey movie... Now we can sell twice as many pickups as Ford. Carry on the great work Mary! 6 Quote Link to comment Share on other sites More sharing options...
rmc523 Posted January 13, 2015 Share Posted January 13, 2015 Old system wasn't confusing if you limit yourself to sedans but lack of foresight (starting at CTS) means no room for downward expansion of model range. SRX is way out in the left field vs. ATS and CTS and GM couldn't trademark any more *RX names for additional CUV models. ELR also another WTF name. Eh, they could've gone with ATS, BTS, then CTS. How many below CTS do they need? Quote Link to comment Share on other sites More sharing options...
rmc523 Posted January 13, 2015 Share Posted January 13, 2015 They probably did get this idea from Bob Lutz. Mary Barra probably called him up like this: Mary: Hello Bob, that Cadillac thing isn't going so well right now. Bob: spend 12 billion more right away. Add 2 sedans right away to the ones not selling now. Mary: we got a guy from Nissan who is doing that now, and he changed all the names to German sounding names and moved Cadillac to New York. Bob: Damn! I didn't think of that... Sounds like a reasonable man. Mary: What should we cut to finance this? Bob: Well, there is this shitty little car called Malibu. No one's going to buy it anyway take some money from that. And if you take some money from the pick up program we can make 2 Corvettes. Mary: We have two pickups- Bob: Great Caesers Ghost... you know the one from Rome not the one in the monkey movie... Now we can sell twice as many pickups as Ford. Carry on the great work Mary! 3 pickups! Don't forget the Sierra. All Caddy is missing is some billion dollar supercar..... we'll hear the announcement sometime soon....just wait.... :reading: Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 13, 2015 Share Posted January 13, 2015 "Here's your chance, Caddy don't let me down." Quote Link to comment Share on other sites More sharing options...
akirby Posted January 13, 2015 Share Posted January 13, 2015 4 pickups - Sierra, silverado, canyon, Colorado Because if 1 is good then 4 must be 4 times betterer...... Quote Link to comment Share on other sites More sharing options...
rmc523 Posted January 13, 2015 Share Posted January 13, 2015 4 pickups - Sierra, silverado, canyon, Colorado Because if 1 is good then 4 must be 4 times betterer...... Oops, you're right...I forgot about the "professional grade" Canyon. Quote Link to comment Share on other sites More sharing options...
papilgee4evaeva Posted January 13, 2015 Share Posted January 13, 2015 $2.4 billion a year. On ONE brand out of four. And all that after they pretty much finished turning their entire lineup over last year. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted January 13, 2015 Share Posted January 13, 2015 What could possibly go wrong....... Quote Link to comment Share on other sites More sharing options...
Hugh Posted January 13, 2015 Share Posted January 13, 2015 $2.4 billion a year. On ONE brand out of four. And all that after they pretty much finished turning their entire lineup over last year. Exactly, why spend precious coin on your bread and butter lineup keeping your bloated organization afloat? Let us waste it on a pie in the sky hail Mary. They can score another bailout because they are too big to fail. The sad part is if they go under, Ford can be screwed due to supplier issues. I recommend the alternate reality where Ford and GM merge and Ford calls the shots. Buick, bye bye, Chevrolet moves up. GMC, Trucks and Utilities only so long Silverado. Cadillac, lose half your lineup. That's just for starters. Rant off... Quote Link to comment Share on other sites More sharing options...
Fgts Posted January 13, 2015 Share Posted January 13, 2015 Hope they know what they doing and (most likely) some vehicles get mainstream versions. Besides what other luxury domestic is putting our rwd sedans? Quote Link to comment Share on other sites More sharing options...
jpd80 Posted January 13, 2015 Share Posted January 13, 2015 (edited) Hope they know what they doing and (most likely) some vehicles get mainstream versions. Besides what other luxury domestic is putting our rwd sedans? I would love to see some RWD Buicks and Chevrolets to help scales of economy but there's the problem, do anything more with Alpha/Omega and you risk destroying the exclusivity of ATS, CTS and CT6. The problem for me is how would GM do that and not undermine the elevation of Cadillac and its premium pricing policy. Ford is lucky because it only has the two brands these days and sharing derivatives is not as difficult as it would be for GM across potentially up to three or four brands. Edited January 13, 2015 by jpd80 1 Quote Link to comment Share on other sites More sharing options...
Fgts Posted January 13, 2015 Share Posted January 13, 2015 I would love to see some RWD Buicks and Chevrolets to help scales of economy but there's the problem, do anything more with Alpha and you risk destroying the exclusivity of ATS, CTS and CT6. That's like saying the Lacrosse and Impala reputation is bad because the Malibu sales are poor, can't have it both ways they have to make a mainstreamer version . The problem for me is how would GM do that and not undermine the elevation of Cadillac and its premium pricing policy. But didn't Caddy cut prices?. It's always the Cadillac get the latest "toys" but that doesn't mean platform sharing is out plus some non-Cadillacs can price well into Cadillac territory (check the the usd price on a GMC Denali, Vette and others ..). Ford is lucky because it only has the two brands these days and sharing derivatives is not as difficult as it would be for GM across potentially up to three or four brands. It's not like GM haven't done it before but again they did it while fiscally bleeding red. Quote Link to comment Share on other sites More sharing options...
PREMiERdrum Posted January 13, 2015 Share Posted January 13, 2015 We all (myself included) crowed about GM keeping Buick/GMC instead of taking the BK opportunity to shed down to just Chevrolet / Cadillac. Looking at where things are now... I have to ask if Chevrolet/Buick (maybe GMC?) would have created the healthiest company. 1 Quote Link to comment Share on other sites More sharing options...
AlRozzi Posted January 13, 2015 Share Posted January 13, 2015 (edited) I don't see how the numbers can work with this strategy. Cadillac will lose money year after year according to my calculations, that is if I am looking at it correctly. With a best-case scenerio in mind and spending $2.4B per year just on funding new models; 1) If C. sells 200,000 units/yr. at an ATP of $50,000 for revenue of $10B and let's say profit per vehicle is $10,000 so that brand profit before new model investment (and taxes and the like) comes to $2B, then already a $400M loss per year is incurred when new-vehicle investment costs are taken into account. 2) A more likely case is sales of 150,000 units/yr./ for an ATP of $40,000 putting revenue at $6B and at best a per-vehicle profit of 10% or $4000, allows for a $600M profit before new-vehicle funding (and taxes) or a loss of $1.8B/yr. when new-vehicle investment costs are considered. (both these sceneraios assume that new-vehicle funding in this case is additional funding beyond what GM would normally accrue to Cadillac.) Edited January 13, 2015 by AlRozzi 1 Quote Link to comment Share on other sites More sharing options...
PREMiERdrum Posted January 13, 2015 Share Posted January 13, 2015 I don't see how the numbers can work with this strategy. Cadillac will lose money year after year according to my calculations, You have already put more legwork into this than GM... I'll guarantee that. 5 Quote Link to comment Share on other sites More sharing options...
akirby Posted January 13, 2015 Share Posted January 13, 2015 We all (myself included) crowed about GM keeping Buick/GMC instead of taking the BK opportunity to shed down to just Chevrolet / Cadillac. Looking at where things are now... I have to ask if Chevrolet/Buick (maybe GMC?) would have created the healthiest company. GM management, for whatever reason, is after revenue and volume with profit margin an afterthought. The blueprint for how to transform GM is right across the street at Ford and the numbers don't lie. When ford makes a product or marketing mistake (like MKT) the impact is small - small investment and with some sales to offset the loss. When GM screws up, they do it with entire divisions and products that fail completely (see Pontiac) and this Cadillac hail mary has that type of failure written all over it. Huge investment in too many niche products in shrinking markets and too late investment in crossovers. Ford is adept at figuring out which vehicles its customers are willing to buy at a reasonable profit and maximizing internal resources and investments to achieve higher profit margins. This puts them in a much better financial position if another downturn should occur. GM is so overextended on fixed costs and their margins don't have as much room to absorb price wars nor do most of their products command higher than average ATPs. And listening to enthusiasts and building products on ego rather than a sound business case is simply a recipe for another disaster. 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted January 13, 2015 Share Posted January 13, 2015 I don't see how the numbers can work with this strategy. Cadillac will lose money year after year according to my calculations, that is if I am looking at it correctly. With a best-case scenerio in mind and spending $2.4B per year just on funding new models; 1) If C. sells 200,000 units/yr. at an ATP of $50,000 for revenue of $10B and let's say profit per vehicle is $10,000 so that brand profit before new model investment (and taxes and the like) comes to $2B, then already a $400M loss per year is incurred when new-vehicle investment costs are taken into account. 2) A more likely case is sales of 150,000 units/yr./ for an ATP of $40,000 putting revenue at $6B and at best a per-vehicle profit of 10% or $4000, allows for a $600M profit before new-vehicle funding (and taxes) or a loss of $1.8B/yr. when new-vehicle investment costs are considered. (both these sceneraios assume that new-vehicle funding in this case is additional funding beyond what GM would normally accrue to Cadillac.) Congratulations, Al - you're more qualified to write business cases than anyone at GM. The only logical explanation is that they are estimating a lot more sales with even higher ATPs and higher gross profit per vehicle. And I'm sure they're not counting on turning that into a profit for several years. Unrealistic business cases are common everywhere. A good company pushes back on them and has checks and balances to ensure they're realistic and achievable. A recent example was the Lincoln LS. They justified an expensive platform with high sales volumes including Europe. But the sales just weren't there and the vehicle became too expensive and ended up as a total business failure (but with a pretty neat owner's club ). G8, GTO, XLR, Solstice/Sky, SS - this is nothing new for GM. The problem is they don't seem to learn anything from these past mistakes. 1 Quote Link to comment Share on other sites More sharing options...
PREMiERdrum Posted January 13, 2015 Share Posted January 13, 2015 When GM screws up, they do it with entire divisions and products that fail completely In other words: When GM screws up, they do it with gusto! Quote Link to comment Share on other sites More sharing options...
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