Cadillac's Report Card 2007

Paul Niedermeyer
by Paul Niedermeyer
cadillac s report card 2007

In 2002, GM reinvented Cadillac. The brand’s edgy new “Arts and Science” look reflected a clean break with the sagging fortunes of the former “Standard of the World.” Unlike Ford, which consigned its Lincoln brand to badge-engineered boredom, GM declared its determination to re-establish Cadillac’s lost luster. The world’s largest automaker’s premium brand unleashed a raft of new products, a last-ditch, all-out fight against the relentless erosion of its large luxury car business. A five year report card is overdue. First, a quick recap…

By 2001, sales at GM’s erstwhile money-printing division had plummeted 60 percent from their historic highs. The average buyer’s age was at 65 and dropping (as in dropping dead). Though the Escalade luxury SUV (introduced in 1999) proved to be a highly profitable beast, Cadillac knew it couldn’t stake its future on the fickle whims of badge crazed blingmobilers.

Since The General has been unable to build small cars profitably since, um, ever, the company also knew that the Cadillac brand represented a mission-critical large passenger car profit center. So GM dedicated their new high-end Sigma rear wheel-drive platform exclusively to a line of premium sedans (CTS, STS) and a crossover (SRX). With lots of bragging about Nürburgring chassis fettling, the BMW 3-Series fighter CTS was the first out of the box.

The press gave the CTS rave reviews. After a sluggish start, sales peaked in 2005 at 61k units. Sales in ’06 are off 11 percent. Year-to-date (YTD) ’07 they’re down 27 percent. Anticipation of the redesigned ’08 CTS is keeping some intenders’ powder dry, but it’s clear the model still hasn’t found its happy place.

The mid-size STS peaked in its first full year (never a good sign). In 2005, Caddy dealers moved just 33k units. In 2006, sales dropped 23%. For ‘07, YTD sales are down by 16%. GM is depending on a major STS interior upgrade to save the day, but it’s probably too late.

Sales of Ye Olde front wheel-drive DTS (formerly DeVille) continue their perpetual free-fall. From 2001 through 2006, they’ve sunk some 40 percent. In 2007, YTD sales are off 26 percent.

The SRX seems to be stuck in the low 20k sales range– despite the fact that crossovers are supposedly the hot vehicle segment in the current US market. The stealth-fighter inspired XLR folding hardtop coupe is literally invisible, with sales below 4k per year. In lockstep with the rest of the family, XLR sales were down 15 percent in 2006, and a whopping 50 percent in 2007 YTD.

After suspension tuning the CTS at the ‘Ring, GM convinced themselves they had enough street cred for a major European sales assault. Two years ago, GM established CCHE (Cadillac Corvette Hummer Europe). The unit’s modest sales goals: 20k units by 2010. The Saab-based, compact, diesel-available BLS was pegged as the volume seller.

The BLS was DOA. With Euro-‘Slades sucking up high test at to the tune of $200+ per tank, racking-up fuel costs that approach $1 per mile, it’s no surprise GM’s adopted a low volume, high mark-up strategy for their rapaciously thirsty gangstamobile. Pitching the $90k, badge-engineered GMT900 Yukon against similarly-priced, highly evolved, deeply admired Bimmers, Mercs, Rovers, Porsches, etc. has been about as successful as you’d expect.

Despite (or because of) the introduction of the Hummer H3 to the Eurozone, the CCHE operation’s projections are downwardly-moving targets. Independent analysts are projecting no more than six to eight thousand sales by 2010. Check back in six months.

Stateside, it’s clear Caddy’s domestic ops have been crippled by a bad case of beancounteritis. The Sigma triplets were handicapped from the git-go by their sub-par interiors. Initial pricing was overly ambitious. And the “Art and Science” design motif failed to seduce young up-and-comers.

And after the one-two-three CTS, STS and SRX splash, the product pipeline has dried up. The foreign competition is running circles around Caddy with a proliferation of variants. The New York Auto Show will offer a glimpse at some long overdue relief: a new 300hp, 3.6-liter V6 for the STS and CTS, a new CTC (a CTS coupe) and CTS-V and a V12-powered Mercedes fighter.

Prototypes of Caddy’s top-of-the-line luxobarge are running on a widened version of GM’s Zeta architecture (a.k.a. Holden Commodore / Pontiac G8). We’ll soon know if the new Caddy has the 16 Concept’s style. We’ll eventually learn if it can withstand the nickel-and-diming that stripped its predecessors of competitive appeal.

Of course, Cadillac is right to develop a higher high end sedan. Every Mercedes C-Class driver thinks (or imagines) that there’s some S-Class in his ride. Without a proper top-line model, denied credible conquesting Euro-fighters, Cadillac has quietly descended into Buick’s old territory: a semi-premium brand, with discount pricing to match.

Cadillac’s new products can’t come soon enough. Literally. If this year’s sales trends continue, 2007 Cadillac sales will be right back where they were in 2001.

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2 of 71 comments
  • Blautens Blautens on Mar 30, 2007

    Let's say Cadillac builds a KILLER product. I'll admit, the SRX reviews were enough to think about putting it on my shopping list back in 2005. Still not good enough. Why? As someone who is in the Caddy target market (30's, sufficient income to purchase anything short of an XLR) here's but two reasons why I'm not even test driving the cars (but I guess to their credit, at least I THOUGHT about the brand): Resale - My $45K Lexus is far less expensive to drive over 5-10 years than a $45K Cadillac. Dealers - I know from personal experience with my local Cadillac dealer that I'm not sending my wife there for purchases/service. It's more than just product - at that price range I'm looking at a total package, a buying experience, if you will. Now, sell me an SRX new at $25K, or a CTS-V at $29K, and I might think differently. But even with firesale prices, it's too much money for indifferent engineering details, abysmal resale, questionable reliability, and typical GM/domestic dealer customer treatment. They've got a tough road ahead...

  • Claude Dickson Claude Dickson on Apr 02, 2007

    Speedy: Let me give you my take on your comments. Interior/layout matters when: a) you are spending this much money; and b) the competition offers significantly superior interiors/layout. Something about spending $35-40K on a car that feels cheap on the inside that would bother me every time I got into the car. As for your list of cars, the 7 Series is the only Bimmer you would consider owning??? Kind words only for the Lexus SL600???Are you serious??? You don't want a car, you want a barge that travels on land. That's what pre-70's Caddies were like as well. All of the cars you profess to like are boulevard cruisers for the "over the hill gang", not driving machines. Driving machines are cars like the BMW 335 or Audi RS4 or something less civilized like the WRX STI. I'm 51, but you can have my rocking chair. You need it far more than I do.

  • Tassos BTW I thought this silly thing was always called the "Wienermobile".
  • Tassos I have a first cousin with same first and last name as my own, 17 years my junior even tho he is the son of my father's older brother, who has a summer home in the same country I do, and has bought a local A3 5-door hatch kinds thing, quite old by now.Last year he told me the thing broke down and he had to do major major repairs, replace the whole engine and other stuff, and had to rent a car for two weeks in a touristy location, and amazingly he paid more for the rental ( Euro1,500, or $1,650-$1,700) than for all the repairs, which of course were not done at the dealer (I doubt there was a dealer there anyway)
  • Tassos VW's EV program losses have already been horrific, and with (guess, Caveman!) the Berlin-Brandenburg Gigafactory growing by leaps and bounds, the future was already quite grim for VW and the VW Group.THis shutdown will not be so temporary.The German Government may have to reach in its deep pockets, no matter how much it hates to spend $, and bail it out."too big to fail"?
  • Billccm I had a 1980 TC3 Horizon and that car was as reliable as the sun. Underappreciated for sure.
  • Inside Looking Out I did not notice, did they mention climate change? How they are going to fight climate change, racism and gender discrimination. I mean collective Big 3.