Cadillac to Expand Portfolio Range as Sales Soar

NEW YORK – Augmenting its product portfolio is a high priority for Cadillac as it rolls toward its highest sales volume in years.

The XTS Vsport is the latest model to join General Motors’ luxury-car lineup. It's actually a performance variant of the XTS large sedan, but a step below the all-out V-series Cadillac has established for the CTS and ATS models.

The XTS Vsport is the first Cadillac to be equipped with GM's all-new LR3 twin-turbo 3.6L V-6 engine that generates 410 hp and 369 lb.-ft. (500 Nm) of torque. The new high-powered engine contains 90% new parts compared with the conventional XTS V-6, says Richard Bartlett, assistant chief engineer on the engine-development team.

Next fall, Cadillac will introduce a CTS Vsport model with the same engine. However, the CTS variant's engine will generate 420 hp. The 10 additional ponies develop because of the way the engine is mounted in the smaller Cadillac.

Cadillac sales jumped 30% through July and could break the 200,000-unit barrier this year if that pace is sustained for the rest of 2013 James Vurpillat, global marketing director, says.

The last time Cadillac sold more than 200,000 vehicles was in 2006, when its volume was about 230,000 units, a spokesman says. Cadillac's all-time high was 347,000 deliveries in 1978. The brand sold about 150,000 units in the U.S. last year.

Cadillac also is doing well in foreign markets, especially China where deliveries are running 34% ahead of last year. Vurpillat says the goal is to sell 100,000 units in the country by 2016.

However, he declines to predict when Cadillac sales in China might eclipse those in the U.S. “It will be a while before we see that,” he says.

Vurpillat attributes Cadillac's success this year to the fact its core products “are doing what we intended them to do.” These include the ATS, CTS and XTS, which compete in segments that account for 70% of luxury-vehicle sales. “You have to make sure you have strong entries to cover these markets,” he says. “Then you pick the markets outside these to fill out the brand.”

Cadillac's foreign competitors frequently share architecture with other models for capital-outlay efficiency. “That's what we're trying to do with our Elmiraj as we explore the Cadillac design language,” Vurpillat says.

He declines to say whether GM will green-light the concept car for production, but says the chances for that increased last week based on the positive reception the model received at its unveiling at the Pebble Beach Concours d’Elegance.

Vurpillat predicts Cadillac eventually will compete on an even footing with the flagship German luxury imports: the Audi A8, BMW 7-Series and Mercedes-Benz S-Class.

“I think you'll see us in that class,” he says. “Our goal is steady growth. Expansion of volume and elevation of the brand (prestige) is our target.”

The ATS has been especially successful in bringing converts to the Cadillac brand, he says. More than 70% of ATS buyers are new to the luxury marque. The top competitive trade-in is the BMW 3-Series, while the Audi A4 is runner-up.

Cadillac will complete an entire remake of its lineup in the fall when it introduces the next-generation CTS as a ’14 model. Yet, the brand still will have only five models in its product portfolio. That's substantially fewer than Lexus, Audi, BMW and Mercedes offer their buyers.

But Vurpillat promises a product-driven extension to the current range. “We're in the middle of addressing our limited portfolio,” he says. Besides the CTS, Cadillac will introduce the ELR later this year. The extended-range electric vehicle will share much of its engineering with the Chevrolet Volt.

Cadillac also is looking at introducing diesel engines into its lineup, especially for the European market, which is floundering because of poor economic conditions there.

However, Vurpillat says there are obstacles to the introduction of diesels here as well, including higher fuel cost and the investment needed to meet future strict emissions standards in the U.S. “You can't do diesels without meeting U.S. (emissions) standards.”

Cadillac's 940 dealers are doing very well, Vurpillat says. The brand shed about 500 dealers when GM was in bankruptcy three years ago. He sees the current total continuing with only small “normal attrition” going forward.