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.