Cadillac: Despite recent flat sales, poised for next phase of 'renaissasnce'

[nadepalma]

Source: http://www.autoweek.com/apps/pbcs.dl...1/businessweek

Cadillac Downshifts: Despite recent flat sales, division says it's poised for next phase of 'renaissance'

By HARRY STOFFER | AUTOMOTIVE NEWS
AutoWeek | Published 04/03/06, 2:36 pm et



WASHINGTON -- Cadillac's U.S. sales were flat last year and are down a bit this year. But company executives insist the leveling off is merely a breather before the next phase of Cadillac's renaissance gets in gear.

From 2001-2004, Cadillac sales rose sharply. In an interview here, Cadillac Product Director John Howell attributed 2005's results to end-of-cycle tail-offs for the high-volume DeVille sedan and previous-generation Escalade SUV.

Howell said Cadillac is considering entries in new segments, possibly including a vehicle at the upper end of the luxury market. More immediately, he added, the company is looking at a unitized-body crossover.

"That section of the overall luxury market is growing," Howell told Automotive News during product-presentation events late last month. "You have to follow what people want."

Meanwhile, Cadillac is rolling out its new-generation Escalade. It is adding two V-series performance models: the $77,090 STS-V sedan and the $100,000 XLR-V roadster. Both prices include shipping.

Healthy rollout

The 2007 Escalade, like its full-sized SUV cousins at Chevrolet and GMC, is off to a strong start. Skeptics predicted that high fuel prices would doom the vehicles.

Gary White, GM North America's vehicle line executive for full-sized trucks, said people who need lots of hauling and towing capacity are going to keep buying big SUVs. The large luxury SUV segment is still growing, he added.

The 403-hp 2007 Escalade has a drag coefficient similar to that of 1984-96 Corvettes. At the same time, it gets 2 mpg more on the highway than the 2006 model, Cadillac officials noted.

Mary Sipes, vehicle line director in GM's full-sized truck group, said dealers who attended a recent meeting planned orders of Escalades that are four times current production. As production increases, she added, supply and demand will converge.

Cadillac will launch additional versions of the redesigned Escalade in late spring and summer. They include the ESV, which is 21 inches longer than the standard Escalade; the EXT, which has a pickup-style cargo area; and a two-wheel-drive base model.

Cadillac is pricing the Escalade models at $54,725 for the 2wd version; $54,210 for the EXT; and $59,680 for the ESV. The all-wheel-drive, standard-length Escalade debuted in January with a sticker price of $57,280. All prices include $875 shipping.

Sipes said those prices are essentially unchanged from the short 2006 model year, when GM began its value-pricing strategy.

More to come?

Cadillac's 2005 U.S. sales were up just 0.3 percent. But the total sales of 235,002 vehicles were the company's best since 1990, Howell said.

Getting back to sales volumes of the 1970s would be tough because competition from other luxury brands is so strong, Howell said. But "if things go well" this year, Howell predicted, Cadillac should sell about 245,000 cars and trucks.

Overseas sales of Cadillacs nearly doubled over the past four years, to 18,320 in 2005.

Cadillac's new global marketing director, Liz Vanzura, is expected to give the division a boost as well.

Howell warned, though, that growth can be a two-edged sword. Growing too much can cause a luxury brand to lose its exclusivity, he said.

Howell, 49, has more than five years on the job. He is the senior executive at Cadillac in both age and length of service. He said the brand is appealing to a younger audience: "We're no longer stodgy."

[SSrevolution]

Originally Posted by nadepalma

Howell said Cadillac is considering entries in new segments, possibly including a vehicle at the upper end of the luxury market.

Not that they need an expensive vehicle but Cadillac does need a really high end luxury vehicle.

[toronado10]

When the next-generation CTS (seen on 60 minutes) comes out, my bet is that that will be Cadillac's next phase of renaissance, since the CTS led the first one.

[nadepalma]

Originally Posted by toronado10

When the next-generation CTS (seen on 60 minutes) comes out, my bet is that that will be Cadillac's next phase of renaissance, since the CTS led the first one.

Good call -- I agree. It's only fitting -- the CTS we presently have pretty much started the current renaissance. Having the next one continue and renew the momentum Caddy has already garnered is only right.

And from the look of it, the next CTS will look much more aggressive and elegant --- and much more expensive. Not a bad way to continue things moving forward.

[boblutzfan]

I keep expecting to hear something about the updated SRX - this will go a long way to helping to boost sales at Cadillac. Everyone knows the CTS is next to be replaced but the SRX needs an update - fast. I expect to see the SRX next week in New York.

[DU Biggs]

if that CTS was the production version, i hope that it is going to be leading cadillac into thier next phase. That car is definately an emotional, exciting, sexy, (add all superlative adjectives here) design

[ChevroletRevived]

The CTS and 07 Escalade are spearheading Cadillac's second ''renaissance''. This next wave, with Lutz firmly in control, is going to be much better then the first, bringing Cadillac back to it's position of Standard of the World.

[jbartley]

not be to technical, but technically the escalade started the renaissance, followed by the CTS.

the trend will continue.

hooray cadillac!

[ChevroletRevived]

What gen Escalade? The first surely didn't. The second gen 'Slade and the CTS came out at around the same time.

[CobaltSScrazy]

yeah i think the escalade was out before the cts and started it, uncle owned a first gen for a while. second gen really began it!

[pkd87]

I see Cadillac outselling Lexus is a few years. That next gen CTS is going to be HOT.

[91 s-10baja]

I hope that the next (revised) STS is soon, I really do not think it is all that great w/ the exception to the V.

[bmwboy2007]

I'm really looking forward to the next generation of the CTS. I'm hoping for more amenities with the new one, including but not limited to rain sensor wipers, swiveling headlamps, six speed automatic transmission availability, and cooled seats. That, along with the previewed interior and partial exterior shots should equal a strong contender.

[uboys]

Originally Posted by SSrevolution

Not that they need an expensive vehicle but Cadillac does need a really high end luxury vehicle.

It needs to get the ones it has now right before it goes off on ventures like that. People will not want to buy a high-end car from a "low-rent" marque.
Remember the Phaeton?
Time for Cadillac to ramp up the CTS/STS etc. They also need to get a worthy RWD/AWD S-Class competitor. Then they will be able to take on Maybach.
Cadillac needs to be selling like hot cakes. There must be no question about its intentions.
Areas to focus on:
1. Interiors+materials
2. Technology+features+gadgets.
3. Point-of-view styling.

[DenCo]

Shouldn't GM pay a bit more attention to it's other brands, which haven't even really received a "FIRST phase of renaissance" yet?