Can Cadillac exist in the premium car market ?
- The Cadillac make (GM group), saw its US sales drop by 50% in almost ten years, from 250 000 units to 130 000 units in 2013. Today, Cadillac sells most of its vehicles in the US (95% of sales), it sells a few thousand in China (33 000 in 2014) and in Russia (10 000 units in 2014). In Europe, the American group's premium brand is almost non-existent.
- Most of Cadillac models are produced in the NAFTA region: in the US in Lansing (ATS-CTS models), Arlington (Escalade) and Lordstown (ELR), in Mexico, at Ramos Arizpe (SRX) and finally in Canada in Oshawa (XTS). In China, the Cadillac SLS and STS models are produced with SAIC .
- In order to compete with German premium brands (Mercedes, BMW and Audi) and Japanese premium brands (Lexus, Infiniti and Acura), the US group must therefore increase sales of Cadillac in the US and in China. Indeed, its competitors (especially German) are much more present in these countries, which are currently the most important markets for premium vehicles.
- However, the current range of Cadillac models spans through fewer segments and through fewer body types than that of a manufacturer such as Audi, BMW or Mercedes. Thus, Cadillac offers sedans/coupes from segment D to segment F and SUV from segments E and F. There is a clear lack of models on the lower segments, C, D, and even B. These vehicles are essential for the success of a premium brand since segments C and D are the largest segments in China (as well as segment B in the foreseeable future), while in Europe BMW (with the series 1, X1 and Mini), Audi (with the A3, Q3 A1) and Mercedes (with the Class A, CLA and GLA) have increased their sales volumes thanks to this strategy.
- Cadillac recently announced that it wanted to double the number of its models by 2020. New models are as expected: a sedan from segment F (2019-2020), a plug-in hybrid version of the new sedan from segment E, the CT6 (scheduled for 2015). Alongside a 4-door sedan from segment C (based on the Chevrolet Cruze in 2018 ), a C-segment SUV in 2017 and a SUV from segment D in 2017-2018. The new leadership of the American brand believes that it will take 20 years to catch up with German brands, however the plan announced seems rather weak in order to face competitors that are already present on these segments in China, the USA and Europe. These same competitors also have their own development plans, and one shouldn’t that other European brands will be targeting these segments: Volvo and Jaguar.
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