Special Coverage
NADA Convention & Exposition
LAS VEGAS – General Motors Corp. expects its Cadillac retailers to drive a 5% hike in the luxury brand’s sales this year.
The auto maker bases its expectation on marketplace reaction to the revamped Escalade lineup and the buzz surrounding the pending launch of the redesigned-for-’08 CTS sport sedan.
Fresh from attending Cadillac events connected to Sunday’s Super Bowl in Miami, Jim Taylor, the brand’s general manager, says the time is right for GM’s luxury marque to make a move in the marketplace. And as in sports, momentum “means a lot,” he tells Ward’s after addressing Cadillac retailers here at the 2007 National Automobile Dealers Assn. convention.
“When you win, you win more,” he says, as if to make a case for GM’s optimism about Cadillac – optimism seemingly shared by the brand’s dealers.
GM’s luxury marque had a lackluster 2006. Sales declined 3.4% to just over 227,000 units, according to Ward’s data, but market share held steady at 1.4%.
Taylor suggests the revamped Escalade – featured prominently in TV ads leading up to Sunday’s Super Bowl – is helping force the pendulum back in Cadillac’s favor.
In the last three months, according to Ward’s, sales of all Escalade models – the fullsize SUV, stretched ESV and EXT sport/utility truck nearly have doubled vs. like-2005.
“The general direction of General Motors has improved over the past year,” adds Diana Pfeiffer of Anchorage-based Alaska Sales and Service, whose market is mainly trucks. “It’s got exciting, excellent-quality products.”
This wasn’t always the case, Taylor admits. As a result, competitive brands such as Lexus and BMW have overwhelmed Cadillac in key luxury-vehicle markets such as California.
Cadillac’s challenge is to first ensure it offers “bulletproof” products that meet the performance expectations of luxury-vehicle buyers, Taylor tells Ward’s. Then it must aggressively market those products to improve the brand’s image.
To this end, Cadillac will pursue a strategy that includes product placements, though Taylor also admits the results of such devices are “very hard to track.”
Buoyed by the dramatic debut last month of the new CTS, dealers seem unfazed about the impact of a 5% sales hike target.
“Dealers who are doing the right thing know that General Motors is on track,” says George Lynn, owner of Roth Cadillac in Erie, PA – the brand’s oldest Cadillac dealership. “General Motors seems focused on dealer profitability. And they know that the right way to do that is to give us the right cars to sell and the right tools to sell them.
“The new CTS is going to be spectacular. It’s a world-class sedan. We’ve had customer inquiries from people who saw the car at the North American International Auto Show (in Detroit). They got that car right.”
Meanwhile, confidence among Buick dealers – who caucused just before their Cadillac counterparts – seems more subdued.
“It’s a work in progress,” says Robert Brogden, owner of Robert Brogden Pontiac Buick GMC in Olathe, KS. “They’re genuinely trying to get into a position for a strong future.”
Other dealers worry the brand’s demographic is still too old. And they heard nothing to counter that fear here.
Adds Steve Middlebrooks, president of Hayward Allen Cadillac Buick Pontiac GMC in Athens, GA: “The biggest thing that I saw was the advertising direction. From the standpoint of Buick, it was hitting hard on quality, which they certainly should.”
In the latest reliability rankings from J.D. Power and Associates, Buick ranked in the top five. But its performance was below the industry average in Power’s 2006 initial quality study.
Meanwhile, Middlebrooks is heartened by consumer reaction to the GMC Acadia cross/utility vehicle – a key GM product that shares its platform with the Saturn Outlook and Buick Enclave.
“I talked to my son this morning and we sold another one,” he says. “I mean, they’re selling, bam, bam, bam.”
On the subject of component sharing, Taylor confirms the close product-development strategy evolving between Cadillac and Saab. Cooperation between the two brands is “more yes than no,” he tells Ward’s.
But sharing will not be done unilaterally, Taylor adds. Decisions to share platforms and components between Cadillac and Saab will be made on a case-by-case basis.
