By on May 14, 2013

Cadillac_ATS_at_NAIAS_2012_(6677990619)

Cadillac may be gunning too hard for Germany’s domain of rear-drive sports sedans, but one area where The Standard of the World won’t be gunning for them is in the volume race. GM CFO Dan Ammann told Automotive News that unlike BMW, Mercedes-Benz and Audi, “We’re not going to be in every single segment that they’re in”.

“In some ways, I think that not having the pressure to sell the last incremental car at whatever cost … is actually not a bad place to be right now. Continuing to move down price points, and microsegmentation of all of these little categories, all seems to be driven by a sort of volume-at-all-costs mentality,” Ammann said. “What that does long term for brand health I think remains to be seen.”

Now, it’s true that Cadillac is working with a different set of circumstances than the Germans. For one, its product and sales base is much smaller than globally-integrated German luxury marques. And frankly, Cadillac should expand a little if it wants to make a real run at Europe and China. A small crossover to compete against the Audi Q3 wouldn’t be a bad idea, along with a brand new Cadillac SRX.

On the other hand, I’m glad that Ammann feels no need to pursue this strategy of going for every last niche. In the long run, I think it will do some damage to luxury brands if they keep moving too down market, as their premium position will be diluted by making the brand too accessible. Europe is plagued by a declining car market, an aging population and a lost generation of young consumers. Their auto makers have to do something to make their products accessible to the next generation. Like Jaguar Land Rover, Cadillac isn’t as exposed to these problems as Europe’s auto makers. Their big markets (the United States and China, India and the UK for JLR) have both economics and demographics on their side. Refraining from the “volume or bust” mindset is a luxury they can afford to indulge in.

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21 Comments on “Dan Ammann Disses Deutschland’s Drive For Volume...”


  • avatar
    AMC_CJ

    Cadiallac has it’s value-volume brand; Chevy. So does, Audi; VW. Duh right?

    BMW didn’t put any BMW badges on it’s Mini-line, nor did Mercedes on it’s Smart (which might of helped the Smart; a $14,00 Mercedes Benz would of sold ten-fold over the current brand).

    They have the right idea. I really like where Cadillac is going, and I love the new CTS. I’d have to see it in person when it comes out, but it looks beautiful and properly more American. The ATS isn’t bad, but it’s screaming for a two-door model.

  • avatar
    Syke

    As I watch (especially) Mercedes-Benz efforts to contine to go even further downmarket, while attemping to visually copy what Americans consider a ‘real’ Mercedes-Benz I can’t help but think back to all my reading regarding the Packard 120 and especially the Packard 110. For those not conversant in this well known episode in automotive history, I strongly recommend ateupwithmotor.com’s article on the subject entitled (if memory serves me well) “How Not to Build a Brand”.

    • 0 avatar
      Featherston

      Interesting comment, and I enjoyed that article as well. I’ve long thought the Three P’s were more analogous to Mercedes-Benz (or at least pre-Lexus Mercedes-Benz) than is Cadillac.

  • avatar
    thegamper

    Sort of a no brainer since GM has multiple brands to fill the lower priced and niche market. Odd though that GM has been trying desperately to move Cadillac upmarket and when all cylinders seem to finally be firing in that regard, the targets they were shooting for are going down market.

    Personally, I feel that Mercedes, BMW, and Audi are simply becomming too commonplace, at least their entry level vehicles. Exclusivity that was there 10-20 years ago has really been eroded. Chalk it up to easy credit and leasing.

    • 0 avatar
      bryanska

      This is exactly why Cadillac’s position is so strong. They’re under no pressure to go downmarket; they’ve got reasonable downmarket entries already, and their opportunity is upmarket. On the other hand, the Germans’ opportunities are downmarket. In the short term, this is good for Caddy.

    • 0 avatar
      Dubbed

      The easy credit and leasing are just a symptoms of something much larger. BMW, Mercedes-Benz, and Audi just want to increase sales, period. How do you increase sales more credit and leasing options.

      Another question to be asked why are they trying to grow so quickly. Are the after the prize of being the largest luxury brand? Are they wanting to increase revenue and profitability? Is it an issue if pride?

      And these brands moving down market must not be seen a management as that bad of a thing I guess. They must see that these model hasn’t hurt them in their home markets. A lot of these new entry level vehicles in America has been sold in Europe for how long.

      Could a local from Europe tell me they think less of the Mercedes S550 for building an A-Class. Or do they think less of the company that builds the R8 and RS6 for building a little A1 diesel.

      • 0 avatar
        AMC_CJ

        “Another question to be asked why are they trying to grow so quickly. Are the after the prize of being the largest luxury brand? Are they wanting to increase revenue and profitability? Is it an issue if pride? ”

        Because the European market is in shambles, it’s crashing, their systems are unsustainable and fiscal-band aids are proving not to work. Any person worthy of a CEO title should be able to see this. The big money to buy those S-Classes are shrinking through taxation, the whole system of wealth is contracting through devaluing of currencies. This is happening here, but Europe is ground-zero.

        Cadillac is a very good position compared to the rest, expect maybe Audi, which has VW to keep them going.

  • avatar
    ben

    I am receiving the contact form submissions for The Truth About Cars website. I developed the original Truth About Cars website back in 2004 in working with the owner/editor at the time, Robert Farago. I also did work on the site after it was purchased by Name Media from Robert. I’m not sure how I ended up being on the recipient list for the contact form again, but you may want to look into that. Emails are being sent to:

    ben @ redwing studio . com

    Best regards,
    Ben Huddleston

  • avatar

    American cars in general don’t offer the interior quality of the German cars, but when it comes to POWER, American cars are NUMBER ONE. If GM or FORD wanted to build a “Veyron Super Sport”, they’d do it and it wouldn’t cost no $1.8 Million dollars.

    The real problem is, Cadillac is chasing driving dynamics while their cars are getting heavier and engine displacement is getting smaller. The ATS feels better the harder you push it, but in everyday driving, it’s not that great. The BMW 3, 5 and 7 on the other hand, handle almost perfectly regardless the speed and cornering undertaken.

    Which would I buy???

    An SRT8!

    • 0 avatar
      thegamper

      The current CTS is definitely no light weight, but the ATS has a very respectable (class leading me thinks) curb weight. I havent driven the ATS back to back with the competition, but I was fairly pleased with the drive. Regardless of which mfg you chose, my personal opinion, there just isnt enough objective difference in the ride to make it a deal breaker for any of those cars.

    • 0 avatar
      Dubbed

      How are they getting heavier? All their new cars weigh less or about the same as their replacements. And their newest car is lighter than that segments average.

      • 0 avatar

        The ATS is an ALL-NEW car so there is no previous model to compare it with.

        The CTS 2014 is about 3616 pounds but that’s in the BASE model which doesn’t come with the 300HP V6 from the current generation.

        Furthermore, the ATS is NOT the super-sporty driving car unless you buy it with the expensive sport package and engine combination to make it so.

        • 0 avatar
          bball40dtw

          I find the ATS very comparable to the equivilent 3-series. Unfortunetly, beacause the ATS cannot fit our stroller in the trunk or a car seat in the back, with me driving, I cannot buy it.

    • 0 avatar
      Kyree S. Williams

      I think it was a poor idea to give the ATS such a capable chassis at the expense of rear-seat comfort…but other than that, it seems like a stellar car.

      • 0 avatar
        bball40dtw

        Kyree-

        I really like the car. The incentive money just went up, and the price is right. Small families that want a fun car are better off with a Focus ST, VW GTI/GLI, a turbo Buick, etc.

  • avatar
    fredtal

    Of course this is GM so we might expect this position to change if with the change in management.

  • avatar
    Dubbed

    Unlike the European brands, Cadillac brand image is still somewhat tarnished. And given the restraint that is being part of GM, they would have a more difficult task of making it jive with the image Cadillac deserves.. Which in turns just have the vehicle muddy the brand image more.

    Plus the fact GM doesn’t have that many “premium” platforms to make some of these niche vehicles for a high end brand like Cadillac.

    • 0 avatar
      Kyree S. Williams

      But, unlike FoMoCO, GM is willing to invest in creating premium platforms for its Cadillac brand.

      • 0 avatar
        bball40dtw

        Is VW willing to invest in premium platforms for Audi? Since they moved VW down market a bit more I guess they are, but an A3 still seems like a nice Golf or Jetta to me.

    • 0 avatar
      bd2

      The only “premium” platform GM doesn’t have on the market is for the flagship class which they will soon have with the Omega.

      Cadillac doesn’t need to go as down-market as the Germans b/c it has Buick to do that duty (sub-entry level/subcompact FWD) as well as ES/TL duty (Buick Lacrosse).

  • avatar
    bball40dtw

    To be honest, I’m more interested in the new Escalade than a small crossover or updated SRX. I want to see if it can keep its huge sales advantage over the next, all aluminium body, Navigator.


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