Month: July 2009 (Page 5 of 7)

The GM restructuring raises the stakes for Cadillac, one of the four brands that will survive the GM bankruptcy. The Detroit News explains that while the brand still has some challenges, quality has improved and the brand has other factors going for it as well.

Under bankruptcy, Cadillac will be able to cut its dealers from 1,500 to 500, enabling the survivors to reduce discounts and become more profitable.

Cadillac is revamping its lineup, too. It is developing a large sedan, the XTS, to replace the STS and aging DTS cars. It will build a small car to compete in the segment dominated by BMW’s 3 Series.

It is now launching the SRX crossover with taillights that evoke glamorous fins of the past.

Next month, Cadillac will roll out a CTS wagon and a coupe next year. “You’ll see us playing in all those segments,” Hill said.

By many measures, Cadillac holds its own against the top-tier luxury brands. “They’re there in quality,” Csere said. “Some models are absolutely there in styling.” The CTS-V, the performance version, “is perfectly capable of running with a BMW M5 or a Mercedes E63 AMG.”

Alexander Edwards, a partner at the San Diego consulting firm Strategic Vision, said Cadillac scores well in surveys measuring “things gone right” — features that appeal to customers, as opposed to the absence of flaws. In the latest survey, it beat out Lexus and BMW, he said.

In this year’s J.D. Power and Associates’ Initial Quality Study surveying new car owners, Cadillac came in third place, behind only Porsche and Lexus.

With its new vehicles, Cadillac is picking off import buyers like Oscar Cabrera, a salesman at Credit Suisse’s fixed-income trading desk in Boston. He and his wife went for Japanese models until three months ago, when they bought an SRX for $36,000. “It came down to the features and price. I like the car,” Cabrera said. “The interior is very nice. It feels very high end.”

Still, while Cadillac has improved its vehicles, analysts say the brand is not clearly defined.

Compared with the German carmakers, it has a lineup of models that bear little relation to one another, from the cushy DTS sedan favored by an older crowd, to the Escalade SUV that attracts superstar athletes and the crisp-handling, rear-wheel-drive CTS.

“You know what BMW stands for, and what Mercedes stands for. Cadillac is all over the lot,” said Art Spinella, president of CNW Research in Bandon, Ore. “They have to decide how to make that lineup cohesive.”

It’s easier to market vehicles when the brand is well defined, he said, and it costs less.

Cadillac also lags in showcasing advanced technology. It rolled out a plug-in hybrid concept at this year’s Detroit auto show, the Converj, with a drivetrain similar to that of the Chevrolet Volt. But, says Howell, “that’s not a project you’ll see in the next couple of years.”

Similar considerations led GM to drop the $80,000-plus XLR sportscar. “Part of that’s driven by the economic situation GM’s in,” Howell said.

The article goes on to explain how Cadillac will not be a major player in Europe, where competition is very tough, and will instead focus on emerging markets like China and Russia. That makes sense for the long term.