I think there is more than a little 'how did this go wrong?' surrounding these cars and, to be honest, I'm kinda' surprised people are surprised. I think a good comparison here can be drawn with the Lexus LS400, and the differences in the introduction of that car and the introduction of these two. If we equate what the ATS and CTS bring to the handling equation to what the 90 Lexus LS400 brought to the luxury equation, the rest becomes the focal point. And the differences there were...
1990 Lexus LS400
*Less expensive than any direct competitor
*More reliable and better quality than the competition in every case
*Superior dealer experience to any rival
***And I'll throw in the bonus that the added luxury relative to the competition, as mentioned earlier, was something that nearly any consumer could and would notice if looked at objectively. Not many people in the luxury segment will be overheard saying 'those added features and qualities are just too luxurious, I don't think I want them'.
Current ATS and CTS
*Priced on par with direct competitors
*Reliability and quality is probably about average, and I'm arguably being kind. ATS hasn't been great to be sure. Certainly, they aren't on par with Lexus
*Dealer experience is inconsistent to say the least. Rumors say there are great stores out there, but many stores still have the same guy who just sold that used Aveo walking you out to look at a CTS-V
***And a negative on handling, realistically this isn't an advantage everybody in this market notices when you start playing at the level Cadillac is......not even those who prefer sporty cars. This is primarily because increased handling prowess and improved steering feel has a point of diminishing returns for most buyers, there will come a point where the handling, steering feel, and power/acceleration of German car X or Japanese car Y is more than enough....and then they start looking at other areas. Luxury, features, and amenities don't seem to hit that ceiling as hard, and in part I would suggest that issue is what you are seeing here.
To wit, you probably have a lot of consumers saying 'my 3 Series handles just fine now, what else are you bringing to the table?', and the answer GM has is 'Art and Science Styling and more of what you think the 3 Series already offers enough of anyway'. I would suggest that isn't working out so well, at least not for the ATS and CTS.
I agree with you on multiple fronts. Core elements of the product, such as dependability, need to be improved with certain models. While they don't strictly need to equal Lexus, they should be reliable cars. The ATS in particular seems to have talk of issues. Dealer service should be top notch everywhere.
That said, I think in some of the other areas you mentioned Cadillac would be challenged to set themselves apart from some competitors by any meaningful metric. Lexus and now some others already have exemplary service, so Cadillac merely matching that won't really be industry-changing the way it was for Lexus. How does Cadillac top that? Do they go to ludicrous levels, like providing services for all cars similar to the Equus or Lincoln Black Label where you never have to take your car in? Or even for the Equus, AFAIK you literally never have to go to one of their stores. They bring the car to you in order for you to test it and so on. Very personalized. The CT6 will most likely be priced comfortably south of the German brands for the most part, but how much cheaper can they make the CTS? Then it gets too close to the ATS, which is really as downmarket as the brand can support in its current situation. Plus, I think if Cadillac produces the best car in the segment (or arguably so), they can utilize effective ad campaigns and so forth to ask for a competitive sum of money, which is different than Lexus but I'll compare it in a moment. Our prized example here is the Escalade. Even though it wasn't really a pioneer of the segment (many would point to the Range Rover, Land Cruiser/LX, and Navigator), it was something people wanted and they have never had to back down on pricing. Indeed, the current one is more expensive than some versions of the aging Navigator, QX80, or lower level GL-Classes. Even without Cadillac's reputation near that of top luxury rivals, people regardless continue buying a Cadillac that they want. I've been a fervent supporter of where the ATS and CTS pricing currently exists relative to their competitors, as they still represent a value but without 1990 LS/2009 Genesis bargain pricing either. Cadillac is more established, even with their lack of European exoticism.
The rise of Lexus is thanks in part to Toyota's pragmatic approach to exploiting a weakness in Detroit's luxury brands. By the debut of the 1990 LS, BMW and Mercedes were by and large a whole tier up on Cadillac and Lincoln. While the Seville was marginally cheaper than the S-Class when it was first released in the 70s, the Seville was what, maybe only 60% of the price or so of it by ~1990? This was in part due to the Seville now more or less going up against the E-Class instead, but you get my point. Anyway, there was room between BMW/Mercedes at the top end of the luxury market and medium level and quasi-upscale brands at the lower end. Had brands like Alfa Romeo or Saab been handled better by this point, they might have doomed further the efforts of Cadillac, Lincoln, or even premium Buick and Oldsmobile options, but with plenty of buyers still acquiring Cadillacs and Lincolns in that day, there was clearly a market for a luxury product not as expensive as BMW and Mercedes but far nicer than a Camry or Taurus. Acura managed to sell a great number of Legends in the mid-to-late 90s, by applying a similar principle of value. The Legend was reasonably cheaper than the 5-Series and E-Class. Niche alternatives from brands like Saab and Volvo were available as well. And I haven't forgotten Audi, but the 90s as we know was the period when they got admirably serious about being the equal of their German peers. They too had something of a value proposition for a time. Ultimately then, Lexus' idea of competing with the MB/BMW competition from a value standpoint was not novel in and of itself - basically everyone
other than BMWMB was doing it. But Lexus had fantastic product and dynamic marketing (from positioning to service to ads), which combined to make the LS in particular so appealing they outsold many of the aforementioned brands in the early years of the first LS. Why would you buy a Seville or Continental for not that much less than a LS?
And perhaps to the surprise of everyone, almost no one really tried to challenge them. Cadillac and Lincoln marched on, largely incapable of reversing their demographic trend and falling market share. Saab remained quirky under GM and not particularly well managed to say the least, and Infiniti had only mild success at best in the 90s, with neither the marketing nor a sufficiently competent lineup to scare Lexus. Audi made very legitimate efforts to create a premium luxury brand and although they've never been able to go toe to toe with the volume of BMW, Mercedes, or Lexus in the US, they eventually became the second biggest luxury automaker globally by volume. Just prior to moving to Ford, Volvo had prepared the S80 that existed mostly under the Ford era, and from there they began lifting themselves into the more discerning and serious portion of the luxury market and away from being merely an intermediate brand. Certainly no Lexus, however. The ironic aspect to Lexus in the US was that they were able to apply values of Japanese expectations to the American industry. High quality was already a given, but also great service. Also, a plush ride and isolation from the road were qualities both Americans and Japanese alike could appreciate. To this day a Crown or Crown Majesta is a very cushy, conservative sedan compared to the much sportier current Lexus GS for example, or European challengers. Lexus had built the ultimate Japanese luxury sedan just as many appreciated more overtly the Germanic nature of BMW and Mercedes cars.
Point being, today Cadillac has more robust competition, and almost everyone other than the Germans already offer a value. Hyundai/Kia now claim bargain luxury right now too, and aside from badge Cadillac would be hard pressed to make inroads by offering similarly, shockingly low prices relative to the quality of product
