Can CT6 Fix Cadillac's Troubled Car Division?
Forget the SUVs for a moment. Cadillac sold more than 100,000 cars in 2013 with similar totals achieved by the ATS, XTS, and CTS. The market has expanded since then, albeit not nearly as much on the car side of the ledger as in the light-truck portion.
Nevertheless, Cadillac will likely sell fewer than 70,000 cars in calendar year 2015.
Is the upcoming CT6 the answer the Cadillac’s car woes, or just another big Cadillac that will do little more than generate all its showroom activity by stealing sales from the CTS and XTS?
To differentiate the CT6 from the masses, Cadillac has produced a massive machine that doesn’t pack a flagship punch to the wallet. For a luxury automaker with heaps of brand cachet, this could be genius. For Cadillac, which has insisted upon projecting an air of confidence in order for buyers to be convinced that Cadillac belongs in the upper echelon, it’s a confusing turn of events.
Isn’t the CT6 supposed to be a worthy high-end Cadillac?
Then why does it have to be less expensive than a Hyundai Equus?
• 2015 on track to be ATS’s worst full year yet
• CTS sales in 2015 down 69 percent compared with 2005 peak
• XTS avg. monthly sales of 1,800 are down from DTS’s 2500-unit average in 2008
• ELR fell to lowest full-month total yet in September
• Escalade on track for sales to rise to seven-year high
• 2015’s 10-month Escalade ESV total higher than full year totals from previous seven years
• 2015 will be the best year ever for the SRX
Locating the sweet spot in any market can be a ticket for success. Consider the Jeep Grand Cherokee, which treads ground from the affordable realm to the luxury arena, all the while offering genuine off-road skills and just enough panache to be deemed appropriate in any neighborhood. The flagship Jeep built a name for itself and as a result, though very much a round peg that doesn’t fit into the industry’s square hole norm, the Grand Cherokee thrives. There are other examples of niche-finding successes, such as the Subaru Outback and Kia Soul. So too are there failed examples: Mercedes-Benz R-Class, Honda CR-Z and Lincoln Mark LT.
But we need only look back to prior generations of the CTS to see that Cadillac can succeed when their car is the size of the 5-Series but leaves dealers because it’s priced like a 3-Series. Cadillac averaged 58,000 annual CTS sales between 2004 and 2008; 50,000 annual CTS sales between 2010 and 2012. Having moved the CTS upmarket and restricted it to just one bodystyle, Cadillac will not likely sell 20,000 copies of the car this year.
The CTS’s failure to capture the attention of most “midsize” luxury car buyers isn’t only the fault of Cadillac’s positioning. Nor is the degree to which the car’s overt athleticism offends traditional Cadillac buyers worthy of all blame. The market has veered away from like-minded cars, as well. While CTS volume is down 39 percent in 2015’s first ten months, BMW 5-Series sales fell 17 percent and the Mercedes-Benz E-Class plunged 29 percent. At Cadillac, SRX volume has risen 25 percent this year. BMW X5 sales are up 23 percent. Combined sales of the Mercedes-Benz M-Class and its GLE successor are up 15 percent.
The CTS is by no means the only fading Cadillac car, however. ATS volume is down 15 percent this year, a loss of 3,776 units over the course of ten months. The XTS has suffered from an 11 percent drop. The Volt-related ELR, hardly consequential because of its extreme rarity, is down 21 percent.
This can’t all be laid at the feet of a slowing car market. Cadillac’s car volume is down 23 percent this year, yet total industry-wide car sales dipped by less than two percent in the first ten months of 2015.
If the CT6 is going to pull off the stunt achieved by prior generations of CTS, it won’t simply be a 7-Series-size-for-5-Series-price achievement. It will be a 7-Series-size-for-Cadillac-CTS-price accomplishment.
The CT6 and CTS – oh, how sales personnel are going to love getting that straight in conversations with customers – are genuinely priced on top of one another. As Mark Stevenson pointed out already, a $210 difference between CT6s and CTSs with the same powertrain is just another reason to not buy a CTS.
Regardless of the CT6’s eventual outcome, we may be placing too much emphasis on the success and failure of Cadillac’s high-end cars. If Cadillac is going to generate greater passenger car volume, they’ll do so with the successor to the ATS. The current ATS sells just once for every 5.5 3-Series’ and 4-Series’ sold by BMW USA.
Furthermore, one could argue that any emphasis on Cadillac’s car division is little more than rendering a verdict on that which has already passed us by. Cadillac is far more of an SUV brand than a car brand now. The SRX, America’s second-best-selling premium brand SUV/crossover, accounts for four out of every ten Cadillacs sold so far this year in the United States. The Escalade and Escalade ESV combine to outsell each of Cadillac’s cars. United, the SRX and Escalade family generate 60 percent of Cadillac’s U.S. volume. Utility vehicle volume at Cadillac is up 23 percent this year and jumped 59 percent during the month of October, year-over-year improvements of 16,122 and 3,388 units, respectively.
The CT6 could surprise us all by becoming a big league hit. If the CT6 does so, it will by no means be a return to 2003, when Cadillac sold 6,900 DeVilles per month. Indeed, if the CT6 does so, it will be at the expense of its Cadillac car siblings.
But that’s unlikely. Instead, Cadillac will rely on the SRX’s successor, the XT5, to be its next big hit. Meanwhile, GM investors will hope that any potential XT3 and XT1 will do for Cadillac what vehicles like the X1, X3, Q3, Q5, GLA, and GLK have done for Cadillac’s German rivals.
Cadillac most recently sold more than 200,000 vehicles in the U.S. in 2007. 2013 volume climbed to a six-year high but was still down 22 percent compared with 2005. Cadillac sales then slid six percent in 2014. Cadillac’s U.S. volume is flat in 2015, on track to fall 65,000 sales shy of 2005’s total.
Keeping your eyes peeled for a resurgent wreathed crest? Don’t expect the CT6 to be the cause of such a resurgence.
Timothy Cain is the founder of GoodCarBadCar.net, which obsesses over the free and frequent publication of U.S. and Canadian auto sales figures. Follow on Twitter @goodcarbadcar and on Facebook.
Join the conversation
Latest Car ReviewsRead more
Latest Product ReviewsRead more
- Del My father bought GM cars in the 60's, but in 1971 he gave me a used Datsun (as they were called back then), and I'm now in my 70's and am happy to say that GM has been absent from my entire adult life. This article makes me gladder than ever.
- TheEndlessEnigma That's right GM, just keep adding to that list of reasons why I will never buy your products. This, I think, becomes reason number 69, right after OnStar-Cannot-Be-Disabled-And-It-Comes-Standard-Whether-Or-Not-You-Want-It and Screw-You-American-Car-Buyer-We-Only-Make-Trucks-And-SUVs.
- 3SpeedAutomatic Does this not sound and feel like the dawn of ICE automobiles in the early 20th century, but at double or triple speed speed!!There were a bunch of independent car markers by the late 1910’s. By the mid 20’s, we were dropping down to 10 or 15 producers as Henry was slashing the price of the Model T. The Great Depression hit, and we are down to the big three and several independents. For EVs, Tesla bolted out of the gate, the small three are in a mad dash to keep up. Europe was caught flat footed due to the VW scandal. Lucid, Lordstown, & Rivian are scrambling to up production to generate cash. Now the EV leader has taken a page from the Model T and is slashing prices putting the rest of the EV market in a tail spin. Deja vu……
- Michael Eck With those mods, I wonder if it's tuned...
- Mike-NB2 I'm not a Jeep guy, but I really, really like the 1978 Jeep Cherokee 4xe concept.
It will be a start. The CT6 finally gets the price/packaging correct with the CT6 offering (SWB) flagship interior room but at a more palatable price-point (the turbo-4 model should appeal to current XTS owners who aren't the type to care so much about performance/handling than interior room and luxury appointments). The problem with the ATS and CTS is that they got the price/packaging all wrong. While the 2 undercut the RWD German competition in price, it was not enough (putting aside the good lease deals offered by the Germans and now Lexus) as any sense of "value" was totally undercut by the ATS and CTS having the tightest rear seats. In terms of passenger room - the ATS was closer to the CLA and A3 as opposed to the C Class and A4, which made it not a good value. Sure, the ATS and CTS (esp. in V-form) had great performance/handling but that is on the low end on the priority scale for the majority of luxury buyers. The ATS and CTS replacements will rectify the price/packaging issue. As for being "less expensive than the Hyundai Equus" (soon to be Genesis G90) - that's really only for the base turbo-4 and the NA V6. The turbo V6 is more expensive than the V8 Equus and will be even more expensive than the new turbo V6 trim for the Genesis G90; plus there will also be a V8 CT6 on the way. In addition, the CT6 is NOT Cadillac's flagship sedan - there will be another sedan slotting on top of the CT6 which will be the S Class and 7 Series competitor. But while a re-jiggered, properly packaged new Cadillac sedan lineup will help, ultimately, Cadillac sales will continue to lag until they get a full crossover lineup (having just 1 is pathetic in this day and age).
The CTS platform is "old". Time for Cadillac to get a new look. I'm tired of looking at them. If a 2003 CTS and a 2016 CTS were parked side by side, most people would be hard pressed to identify the newer model. I miss the 60's-70's when cars got a fresh look each year. How hard would it be for an automaker to change out the plastic front ends and tail lights once in a while? It couldn't affect the bottom dollar that much. I remember the 90's when the Riviera, Aurora, T-Bird, PT Cruiser, etc. came out...lots of sales/interest, then people stop buying them because they never change. The automakers are dropping the ball by not changing up the look of their cars once in a while to keep the public's interest. I'm a big Caddy fan, but they all look a little too much alike and that look is "old".