Dan Ammann Disses Deutschland's Drive For Volume

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.