Cadillac's strategy to restructure and fill the gaps in its portfolio

Cadillac's strategy to restructure and fill the gaps in its portfolio
Only main bodies, unique sizes, up to date with the evolution of the segments
GMSilverado/GM Inside News
October 2, 2017


As we approach the start of Cadillac's most important product offensive, scheduled for mid-next year, the brand is revealing new data that allows us to better understand its strategy and continue to assemble the puzzle of its next portfolio of products.

In the last two months the brand directive has released information quite enlightening. On the one hand, the president of the company, Johan de Nysschen, revealed to the media the fourth identification plate of the nomenclature: CT5, corresponding to the future sedan for segment D or Lux 3; which tells us some things about the implementation of the identification system, as we will discuss later.

But the most relevant, undoubtedly, is the disclosure of a sheet with the updated product plan that Cadillac presented during an event in China in early August (Thanks to leonjulie). This is the second time we have access to an official scheme of the product plan designed under the current leadership of the brand:


There are several aspects to highlight from this slide of 2017. Firstly, it confirms that the rumor of the supposed cancellation of the flagship was not true; as it was denied by Johan himself. It is corroborated that the argument "will not be a large four door sedan" did not mean that it was replaced by an SUV or a model related to the Corvette Zora as some misinterpreted (if so, it was enough: 'will not be a large sedan'). Uwe Ellinghaus, Chief Marketing Officer, said: “The CT6 [...] is not the end of our dreams; there will be a larger Cadillac, but what we do not want is again a classic sedan. We want something more expressive in design that may deviate a little from the three-box look.”

Differences

Also, the differences that this new sheet has with respect to the one presented in the first half of 2015 stand out. For the first time we can clearly appreciate the decisions made by the brand directive after the arrival of Richard Brekus, Director of Product Strategy since August 2015.

In the car offer you can see a clear reduction: it passes from 5 to 4 columns of models and disappear three silhouettes including a convertible variant. This makes perfect sense, given Cadillac's priorities and low Coupe / Convertible sales in all regions (in China, no competitor locally manufactures those versions). In the utilitarian range there is only one difference, which reveals the priorities of the brand: the delay of the input crossover, in favor of the model that will accompany the Escalade at the top of the range.

Segmentation and nomenclature

Another interesting aspect is the relationship that this presentation allows us to make between the segment to which each model is addressed, with the identification plates that the brand has communicated so far: CT6, XT5, XT4 and CT5. If we detail, we can notice that there is a pattern that repeats and could be revealing the strategy of the brand to baptize its models. In all four cases the plaque number is always 2 times greater than that used to identify the segment: CT6> Lux 4; XT5> SUV 3; XT4> SUV 2; CT5> Lux 3.

It should be remembered that Cadillac has the rights to the CT and XT plates from numbers 2 to 8. If the brand continues this pattern, the composition of the range in the first stage of expansion will be as follows: Autos | CT4, CT5, CT6 and CT7; Utilities | XT3, XT4, XT5, XT6 and XT7. This also reveals that, unlike several rivals, in the future the brand will continue with its tendency to assign an identification plate to each model regardless of its eventual body variants; for which the classic Coupe, Convertible, etc. tags would be used.

Car Portfolio | 4 Models: Three Sedans and a Liftback​

The current range of Cadillac cars is not characterized by being efficient. It is composed of 5 vehicles: four Sedans (one with an extended variant) and a Coupe, but only cover two segments of the market and with much international inconsistency. The situation is critical not only for the obvious overlap, but also the lag of the models with respect to the standards of each segment (which are constantly evolving), the serious internal packaging deficiencies in three of them and the sustained decline in car sales in favor of crossovers; especially accentuated in the US market.

To solve this problem, the current management of the brand projects a complete realignment for the next range of cars that consists of models with a focus and positioning at the forefront of each segment. The next car portfolio will be composed of 4 vehicles: three Sedans and a Liftback, which will cover four segments and with consistency in all regions. In addition, each next model will have a one size fits all markets and, as we have seen, low-volume bodies were discarded to optimize the investment of resources.

• CT4: New segment. It will be the entry-level sedan for the Cadillac range, slightly smaller than the ATS but with a smaller engine capacity and better interior packaging. It will coincide with the arrival of the new BMW 2 Series Gran Coupe and the next generations of the Audi A3 Sedan and Mercedes Benz CLA but, unlike these, will be the only with rear-wheel drive in that category. This is an emerging segment with great potential for growth worldwide, basically consisting of cars with a similar size to the D segment standard a decade ago (L: 180", WB: 108") but more efficient in consumption and emissions. It will have a V-Series variant.
  
  
• CT5: The next sedan of the D segment, a kind of merger between the Chinese ATS-L and the current CTS, with a size and positioning similar to that of the second-generation CTS. Unlike the CTS 2G at the time, it will not be a 'more for less' because it will be within the new standards of the segment and compete directly in the LWB subdivision so popular in China and suitable to what many American consumers expect. It will have a V-Series variant.
  
  
• CT6: Large sedan initially conceived for the F segment (Lux 5), but positioned by the incoming leadership in the E segment (Lux 4) because it does not have enough features to be a real alternative to the flagships of the competition. It will have an update for the 2019 model and its second generation is scheduled for 2022, which will surely be better focused on the segment in which today competes because by that date Cadillac will already have a suitable flagship in its portfolio.
  
  
• CT7: New segment. It will be the definitive flagship of Cadillac, with a five-door liftback body inspired by the Escala concept to be positioned as the main alternative to the models of the German trilogy within the two largest markets in the world. No further information has been leaked because it is at an early stage of development, but is likely to debut the next GM modular platform for all its rear-wheel drive models called VSS-R; which will serve as a cornerstone for the next generation of brand cars.
  
  In addition to a "more expressive" design than its rivals, the CT7 should stand out as a car at the forefront of technology. For example, it is likely that by 2021 the Super Cruise™ will pass from the current level 2+ to 4 autonomous driving; which would transform him into a candidate to lead in the implementation of that level along with the next generation of the Mercedes S-Class that is also planned for the beginning of the next decade (Audi has just introduced level 3 with the new A8).

Utility Portfolio | 6 Models: Five Crossovers and an SUV​

The utility category represents the biggest gap and at the same time the greatest strength of Cadillac. And it is that despite its limited offer and having built only two models (taking the XT5 as a third-generation SRX, which is really), is the only area of its last 20 years that is associated with success. In addition it is where it has greater opportunity of leadership since, unlike the segment of cars, there the rivals have less consolidated reputation.

Today the brand has only the XT5 and the Escalade, which has prevented it from taking advantage of the boom that has been experiencing the sector. The positive news is that more growth and opportunities are projected in all regions, so the range will increase to 6 models to consolidate as the core of the portfolio and Cadillac's global expansion.

• XT3: Next segment. The smallest Cadillac crossover, intended for the B segment (Lux 1), will be the last to arrive. Although not listed in the updated plan, last month Johan de Nysschen told Forbes that it is still under development and is one of two crossovers the brand will launch after 2020 (following of the Escalade's global complement, as can be deduced from the sheet). It is an emerging segment in the luxury market that recently started Audi with Q2, but is expected to be established in the medium term; product of the metamorphosis that will experience the compact range of the competition with the arrival of its next offers of segment C (Lux 2).
  
  
• XT4: New segment. Although first its platform and then its nameplate seemed to suggest that it would be a complement of the XT5 in segment D (Lux 3), the slide clarifies that it is not so. An analysis of the panorama in the competition reveals, however, that it could be along with the next BMW X2 one of the first exponent of the new canons that will adopt the segment C from next year; when in addition the arrival of the completely new Mercedes GLB and the second generation of the Audi Q3 is expected.
  
  As in the car category, the C segment of utilities is about to evolve and its members could have dimensions similar to those that were standard in the first D-segment SUVs offered by the competition a decade ago (X3, GLK): L: 179.9", WB: 109"; a size exactly midway between the new generations of the BMW X1 and X3, for example.
  
  
• XT5: Launched in 2016 to continue the work of the second generation SRX within the D segment (Lux 3). It is expected to receive an update in 2019 and a new generation in 2022, which according to IHS Automotive information could unveil GM's next modular platform for SUV's called VSS-S. Unlike the SRX, with a similar size to contemporary E-segment models but at a lower price category, today the XT5 fits better into the new D-segment standards and is below the new E-segment trend that soon shall adopt all competition.
  
  
• XT6: New segment. Medium crossover with three rows of seats, designed as an alternative for segment E (Lux 4). It will reissue the role of the first generation SRX with configuration and similar dimensions (L: 194.9", WB: 116.4"), but offering an improved overall approach and without rear-wheel drive.
  
  
• XT7: Top-of-the-range crossover, designed as a complement below the Escalade in segment F (Lux 5), with sales projections and global manufacturing. It is probably being developed in conjunction with the CT7, which is expected to share platform, powertrain and technology package. Although precise information is not yet available, being positioned between two models with three rows of seats, it must fulfill a different function. Therefore, it is possible that it offers a "more expressive concept" (from the Bio of Richard Brekus) to function as a halo product that contributes to raising the image of the brand.
  
  
• Escalade: Fifth generation, developed over GM's upcoming modular truck platform called VSS-T. For the first time, it is being idealized outside GM's planning department and under the direction of people with extensive experience in the premium market; which promises greater differentiation and exclusivity vis-à-vis their historic corporate relatives. Also for the first time will have a real flagship in the family, as support at the mechanical and technological level.

Composition of the Portfolio​

Schedule of upcoming releases | Start of sales (Updated)​

1. 2019 XT4: Summer 2018.
2. 2019 CT5 (*): Winter 2018/19.
3. 2020 XT6: Summer 2019.
4. 2020 CT4 (*): Winter 2019.
5. 2021 Escalade: Summer 2020.
6. 2021 CT7: End of 2020 - Early 2021.
7. 2022 XT7: During 2021.
8. 202? XT3: After 2021.

* They could exchange position