jpd80 Posted January 21, 2015 Author Share Posted January 21, 2015 (edited) How many buyers looking at a BMW or Mercedes even consider a Cadillac in the first place? Great point. GM woke up one day and said, "hey, let's 1) make Caddy the North American BMW, 2) charge higher prices and 3) get rid of existing low brow buyers" And by golly, they have succeeded in doing 66% of that plan to date... Edited January 21, 2015 by jpd80 Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 21, 2015 Share Posted January 21, 2015 (edited) GM doesn't need to lose money on 2,000 or so CTS V8 it may sell a year to help offset the development cost of the LS V8 program... they have plenty of volume already from pickup trucks to Corvette etc to carry the load. I don't think I made myself clear enough---been a long and confusing day. What I meant was, GM doesn't have a V8 with a decent balance between performance and economy. You can put the 5.3L V8 in the CTS but that would be silly--you'd just be putting in a V8 in order to say you had a V8. It'd be a V8 with all the power of a V6. Or you can make the 6.2L V8 less expensive and you're almost certainly flirting with gas guzzler taxes going forward, and it's way too powerful (443 550 vs. 600+ Caddy CTS V). In short, they don't have a decent V8 for the class. Does that make sense? As I said, it's been a loooooooooonnnnnnnnnnng day. Edited January 21, 2015 by RichardJensen Quote Link to comment Share on other sites More sharing options...
rmc523 Posted January 21, 2015 Share Posted January 21, 2015 Great point. GM woke up one day and said, "hey, let's 1) make Caddy the North American BMW, 2) charge higher prices and 3) get rid of existing low brow buyers" And by golly, they have succeeded in doing 66% of that plan to date... This happening only after their plans to make Pontiac the American BMW went out the door with its closure... Quote Link to comment Share on other sites More sharing options...
Fgts Posted January 21, 2015 Share Posted January 21, 2015 I don't mean this as a put down but you are in Australia... I don't think you are very in touch with the luxury car market in the US. V8 is not really a thing... sure, Mercedes and BMW still offer V8 in their midsize car but they account for such a tiny % of sales. The vast majority of the market is 4 and 6 cylinders and Cadillac has not one but two competitive products in this segment. Cadillac sales are hitting a wall because it cannot bring down the monthly lease payments due to lack of captive bank to subsidize the residuals. I don't think the lack of V8 has anything to do with the state of Cadillac sales. Also, to put it in context, CTS outsold Audi A6 in 2014. CTS + XTS would put Cadillac right in #2 spot in midsize luxury sedan sales in the US market, ahead of BMW and just behind Mercedes. Cadillac has a real issue with ATS/compact size luxury car. It doesn't really have a problem with selling mid size luxury cars, V8 engine or not. XTS sales are falling as you'd expect for a 4 year old car while CTS is only down slightly. Would Cadillac like to increase sales? Sure... but it is fighting an uphill battle with stated (not actual) residual value on lease contracts. This is the segment that de Nysschen wants to enter with a RWD product based on the next generation Alpha platform. I think even BMW would say "good luck with that". Mark my words... the subcompact Cadillac will be FWD. Great analysis but from what i've read the next ATS will grow in size (think Chinese LWB ATS as standard length) to accommodate the smaller Cadillac on Alpha. One bigger question is what Chevy or Buick get to have a counterpart to it?. I'd love to see a rwd Chevy Nova to return. Quote Link to comment Share on other sites More sharing options...
bzcat Posted January 21, 2015 Share Posted January 21, 2015 (edited) I don't think I made myself clear enough---been a long and confusing day. What I meant was, GM doesn't have a V8 with a decent balance between performance and economy. You can put the 5.3L V8 in the CTS but that would be silly--you'd just be putting in a V8 in order to say you had a V8. It'd be a V8 with all the power of a V6. Or you can make the 6.2L V8 less expensive and you're almost certainly flirting with gas guzzler taxes going forward, and it's way too powerful (443 550 vs. 600+ Caddy CTS V). In short, they don't have a decent V8 for the class. Does that make sense? As I said, it's been a loooooooooonnnnnnnnnnng day. Ok yes, I agree... the cost of making an unique version of LS V8 for CTS that can hit the power/fuel efficiency benchmark to be competitive with Audi S6, Mercedes E550 or BMW 550i is definitely cost prohibitive for such a small volume. Edited January 21, 2015 by bzcat Quote Link to comment Share on other sites More sharing options...
bzcat Posted January 21, 2015 Share Posted January 21, 2015 Great point. GM woke up one day and said, "hey, let's 1) make Caddy the North American BMW, 2) charge higher prices and 3) get rid of existing low brow buyers" And by golly, they have succeeded in doing 66% of that plan to date... 1. They didn't wake up one day and decide that. It had been the strategy since the original CTS to challenge BMW on performance and not make any excuses because it is a "Cadillac". 2. I already explained this... MSRP is kind of irrelevant. Monthly lease payment is the issue. And the sales data seems to indicate CTS is selling just fine despite the increase in price, outselling most rivals. ATS is the problem and Cadillac already said they will address that by making the car bigger next time. 3. I don't think Cadillac view their previous buyers as low brow, but they are definitely old and they likely won't be buying more Cadillacs in the future. If the brand is going to survive, they need to conquest buyers from other brands and that means going after Mercedes, BMW, Audi, Lexus. Quote Link to comment Share on other sites More sharing options...
bzcat Posted January 21, 2015 Share Posted January 21, 2015 Great analysis but from what i've read the next ATS will grow in size (think Chinese LWB ATS as standard length) to accommodate the smaller Cadillac on Alpha. One bigger question is what Chevy or Buick get to have a counterpart to it?. I'd love to see a rwd Chevy Nova to return. Chevy will get the Camaro. Buick remains to be seen... Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 21, 2015 Share Posted January 21, 2015 (edited) I don't know if Ford is going to do a large sedan on CD6, but if they do, the amusing thing is that they can immediately drop in a V8 that is competitive w/the Germans--something that Cadillac has never been able to do. Edited January 21, 2015 by RichardJensen Quote Link to comment Share on other sites More sharing options...
akirby Posted January 21, 2015 Share Posted January 21, 2015 1. They didn't wake up one day and decide that. It had been the strategy since the original CTS to challenge BMW on performance and not make any excuses because it is a "Cadillac". 2. I already explained this... MSRP is kind of irrelevant. Monthly lease payment is the issue. And the sales data seems to indicate CTS is selling just fine despite the increase in price, outselling most rivals. ATS is the problem and Cadillac already said they will address that by making the car bigger next time. 3. I don't think Cadillac view their previous buyers as low brow, but they are definitely old and they likely won't be buying more Cadillacs in the future. If the brand is going to survive, they need to conquest buyers from other brands and that means going after Mercedes, BMW, Audi, Lexus. Cadillac has a much larger builtin customer base of Chevy, Buick and GMC owners who want to upgrade to a luxury vehicle. They are already brand loyal in most cases so you just have to give them a decent product at the right price. The old CTS was fitting this bill rather well - selling at a 5k-6k clip towards the end. They replaced it with not one but 2 new vehicles at a cost of at least $5B only to end up with fewer sales than before but with 10 times the cost. CTS may be selling ok relative to other brands and models but compared to the old CTS - not so much. CTS is too expensive for those buyers and the ATS is too small. Making ATS bigger might help but then aren't you too close to CTS? Why do you need both? A midsized vehicle that's $6K - $10K more than Chevy/Buick counterparts is the sweet spot where you can get good volume and decent profits with little effort. Then you can add some niche vehicles at lower volumes. And let's not forget that those OK sales numbers from last year came thanks to the biggest incentives in the industry. 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted January 21, 2015 Share Posted January 21, 2015 I don't know if Ford is going to do a large sedan on CD6, but if they do, the amusing thing is that they can immediately drop in a V8 that is competitive w/the Germans--something that Cadillac has never been able to do. Are you implying that the Northstar V8 wasn't all that good? Quote Link to comment Share on other sites More sharing options...
Fgts Posted January 21, 2015 Share Posted January 21, 2015 Cadillac has a much larger builtin customer base of Chevy, Buick and GMC owners who want to upgrade to a luxury vehicle. They are already brand loyal in most cases so you just have to give them a decent product at the right price. The old CTS was fitting this bill rather well - selling at a 5k-6k clip towards the end. They replaced it with not one but 2 new vehicles at a cost of at least $5B only to end up with fewer sales than before but with 10 times the cost. CTS may be selling ok relative to other brands and models but compared to the old CTS - not so much. CTS is too expensive for those buyers and the ATS is too small. Making ATS bigger might help but then aren't you too close to CTS? Why do you need both? A midsized vehicle that's $6K - $10K more than Chevy/Buick counterparts is the sweet spot where you can get good volume and decent profits with little effort. Then you can add some niche vehicles at lower volumes. And let's not forget that those OK sales numbers from last year came thanks to the biggest incentives in the industry. Keep in mind some of the CTS sales drop is from the coupe dying. The V8 issue is GM can (or will) offer an n/a 6.2 but can it meet the smoothness of the old N.star?. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 21, 2015 Share Posted January 21, 2015 It's not about whether the 6.2L can compete with the Northstar. It's whether the truck-tuned 6.2 can compete with the BMW and Mercedes V8s, which it can't. Quote Link to comment Share on other sites More sharing options...
rmc523 Posted January 21, 2015 Share Posted January 21, 2015 Keep in mind some of the CTS sales drop is from the coupe dying. The V8 issue is GM can (or will) offer an n/a 6.2 but can it meet the smoothness of the old N.star?. I thought they continued selling the old CTS coupe alongside the new CTS sedan? 1 Quote Link to comment Share on other sites More sharing options...
Fgts Posted January 21, 2015 Share Posted January 21, 2015 (edited) I thought they continued selling the old CTS coupe alongside the new CTS sedan?That was for 14', then the Sigma coupe died. A replacement for the coupe (with a convertible) is to become it's own model in a couple of MYs or so. RJ the Lt1 is putting out 460 in a base SR Vette form. Why can't it compete with a similar Benz V8 (which is forced induction)?. I bet in that tune it won't be up to Cadillac NHV standards. Edited January 21, 2015 by Fgts Quote Link to comment Share on other sites More sharing options...
sullynd Posted January 22, 2015 Share Posted January 22, 2015 This happening only after their plans to make Pontiac the American BMW went out the door with its closure... Let's make Pontiac Cadillac the American BMW. Let's make Saturn Buick the American Opel. Let's make Chevrolet the... Do we still make Chevrolet? 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted January 22, 2015 Share Posted January 22, 2015 How many coupes were they selling? 2-3 per month? Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 22, 2015 Share Posted January 22, 2015 I bet in that tune it won't be up to Cadillac NHV standards. Transitively and more correctly speaking, it would not be up to BMW and Mercedes NVH standards. It is more or less a given that Cadillac has no particular standards that have not been cribbed from other manufacturers. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted January 22, 2015 Author Share Posted January 22, 2015 No matter which way you slice it, Cadillac is simply not turning heads that think German Luxury first. And the more it tries to appeal to those conquest buyers, the more it alienates itself form traditional buyers. And for those of you that think, what's the point worrying about one time buyers, think about where those buyers originally came from - mostly graduating from lower GM brands or elsewhere. So kissing off that buyer group is to kiss of what seems to be around half of all ATS and CTS potential sales - Good Job Cadillac. 1 Quote Link to comment Share on other sites More sharing options...
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