De Nysschen Says Cadillac Will Stick With Pricing Strategy, Confirms New York City Move
Cadillac’s aggressive pricing strategy is here to stay, according to the brand’s new chief, Johan De Nysschen, and if he has his way, there won’t be major incentives to help juice sales either.
Speaking to Automotive News, De Nysschen said
“We cannot deny the fact that we are leaving behind our traditional customer base…It will take several years before a sufficiently large part of the audience who until now have been concentrating on the German brands will find us in their consideration set. Either you have to bring your volume aspirations into alignment with reality and accept that you will sell fewer cars, or you have to drop the price and continue to transact at the prices where you were historically. I think the logical conclusion is that it’s better to build off a very solid base in terms of [product] credibility, charge a fair price for the car and realize you have to wait until the volume comes,”
De Nysschen’s strategy is partly based on the playbook he used at Audi, where he oversaw a gradual, deliberate climb from an obscure luxury arm of Volkswagen into Tier 1 luxury brand status, through a combination of engineering, marketing and a focus on interior and exterior design.
The story of Audi is unique due to the fact that it stands in stark contrast to the desire for rapid short-term results in many corners of the auto industry. It’s tempting to think of Audi as an overnight success story, but the reality could not be more different. De Nysschen is hoping to emulate that same pattern of growth, but that will require a fair amount of latitude from GM management, and the commitment to a longer-term vision that has not always been present at the auto maker. De Nysschen also confirmed that some functions will move to New York City, though details were unclear.
According to De Nysschen, he will have a hand in all functions of the brand, from engineering to design to product planning to dealer development. In the short-term, he must deal with relatively poor sales for the brand’s ATS and CTS sedans, ballooning inventories and a pricing strategy that has the new sedans competing head to head with the German brands in terms of sticker price. De Nysschen is willing to play the long game on this last front – but he’ll have to count on GM’s buy-in at every step of the way for it to work.
More by Derek Kreindler
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The Alpha platform was a mistake. GM should have slapped a new face and interior on the existing CTS like Infiniti did with the G37 -> Q50. Then make a bunch of Escalade style CUVs with a Caddy Evoque on the low end. And make a midsize luxury plug in hybrid with styling like the IMAJ. Nobody cares about anything Cadillac is trying to do now. They either put their eggs in the wrong basket (luxury market doesn't care about Ring times) or they botched stuff people ACTUALLY care about (interfacing, rear seat room, value, style/conspicuity). ATS/CTS are so non-descript... I am blown away by how boring they look every time I see them. Germans can get away with that... they can get away with anything, they can get away with the X6. Caddy made a grave error thinking they could play the German's game
Take a look at the interior of the new C-class. THAT is where Cadillac needs to be if they want to get some attention from the market. The new C looks like it costs twice as much as it does. The ATS looks like it costs $5K less than it does. Whoever is responsible for that IP in the ATS should be fired. It looks like it was pulled from one of the old GM dustbuster minivans. Half circle speedos are not sporty. PERIOD. A half circle, center mounted speedo to me just screams minivan. Whoever is responsible for the black plastic slab center stacks full of buggy, unresponsive touch buttons should be fired. TODAY. Touch buttons "like a phone!!!!" are NOT luxury. Anyone with half a braincell could look at the knobs that Audi uses for its HVAC controls, and then look at Cadillac's touch buttons which might work the third time you attempt to press them. Maybe. Which one feels like it belongs in a luxury product? Considering how good the new C-class is on the inside, I would be scared to death about how nice the new E-class will likely be, let alone the third generation CLS. Mercedes is clearly out for blood. Again the new C-class is the perfect example of what to do. Execute, execute, execute, and they did. The C-class was always the runt of the M-B litter. They've had dirt cheap interiors and crappy, left-over uncompetitive engines for decades. Sound familiar? You always got the sense that M-B built the C-class because they had to, and the execs didn't really care that the 3 series and A4 stomped all over it. That's all done. The new C's engines will take on anybody. The interior makes "design king" Audi's A4 look like a Jetta on the inside. Steering feel and chassis performance are great from an enthusiast stand point, but enthusiasts don't buy cars. At least not new ones. BMW knows where the money is, that's why the 3 and 5 have turned into Buicks. They want to sell cars. Another thing that nobody has mentioned yet - Bose. Dump Bose. Mercedes and Porsche offer Burmester systems in their cars, one of Germany's elite hi-fi brands that sells $20K+ amplifiers and speakers. Bose sells glorified boom boxes to idiots. You can get a Bose stereo in a Mazda or Nissan. Audi was smart enough to offer a high-end B&O option, hell even Acura knew enough to dump Bose for the ELS and Krell systems they have now. One of the smartest moves Lexus made way back when was going from Nakamichi, a brand almost nobody outside of Japan has ever heard of, to Mark Levinson, which especially at the time was one of the US's premier audio brands. In an age when you can get leather, NAV, heated front and ventilated seats, etc in a Kia, you need something to differentiate your product. A high-end badge for your stereo system is a great way to do that. Leave Bose for Buick. Mercedes and Porsche have Burmester, Jag and Bentley have Meridian and Naim. Get a US brand in the same league like Audio Research to design your stereo. Instant prestige boost.