General Motors Co.’s Cadillac luxury plans to reveal a refreshed large XTS sedan later this year and will launch a new crossover smaller than the XT5 in the second half of 2018, according to Cadillac’s president.
The Detroit automaker’s luxury brand has four sedans, one crossover and one SUV in its lineup. U.S. industry customers now buy nearly 60 percent crossovers, SUVs and trucks compared to 40 percent cars.
In the past few years, sedan sales including in the luxury space, have dropped significantly while GM has improved the quality and competitiveness of its offerings.
“It’s left us with the obvious difficulty,” Cadillac President Johan de Nysschen, said in a recent interview with The Detroit News. “The core part of our volume lineup is in the market that’s contracting while we are unable, as good as XT5 and Escalade are, we are unable to fully exploit the updraft that’s taking place in the other half of the market.”
The carmaker in January 2015 said it planned to pump $12 billion into the brand for eight all-new vehicles that would arrive by the end of the decade. Two of those include the new XT5 crossover and CT6 sedan.
What’s expected to be the called the XT3 crossover is slated to be built at the Fairfax Assembly Plant in Kansas City, Kansas, analysts say. Some analysts expect the XT3 will sell about 25,000 to 30,000 vehicles a year.
Cadillac also is planning a new crossover that will be positioned between the Escalade and the XT5, de Nysschen said. Some analysts said that SUV could be built at the Detroit-Hamtramck Assembly Plant, possibly arriving in 2019. A second smaller crossover may come after 2020, de Nysschen said.
Cadillac expects to launch a new product every six months from mid-2018 through the end of 2020 into 2021, de Nysschen said. By then, Cadillac will have products covering 90 percent of the luxury market, up from about 50 percent today, he said.
“That should put us in the strong position, whether the market continues to favor of crossovers, we have them,” he said. “If it rebounds back into sedans, we have them, we’ll be in a far better balanced position.”
Cadillac also plans to add a new, entry-level compact sports sedan that will be aimed to compete with vehicles such as the Audi A3 and Mercedes-Benz CLA. Some analysts have forecasted that Cadillac will add a small sedan, and coupe/convertible in late 2019, using its Lansing Grand River Assembly Plant. That sedan could be called the CT3, while the coupe/convertible variant could get the CT4 name, analysts say.
The brand wants to add an entry-level luxury nameplate because the segment is growing in the U.S. and China, de Nysschen said.
“As our current sedan lineup reaches a full lifecycle, we will kind of realign our sedan portfolio to create better separation between the models so that we not only distinctly differentiate the various entries in terms of product substance, technologies and price points, but also bring them into better alignment with different target customers for each of the entries,” de Nysschen said.
Cadillac also plans to elevate its CT6 sedan by “introducing higher positioned derivatives,” he said.
Cadillac’s U.S. sales last year totaled 170,006, down 3 percent from 2015 totals. Globally, Cadillac sales rose 11.1 percent to 308,692 vehicles, the highest figure in 30 years. The brand was aided by a record year in China, where sales reached 116,406, up 45.9 percent from 2015.
Within the next few years, de Nysschen expects Cadillac China sales to eclipse the brand’s U.S. sales as the Chinese luxury market — already the largest in the world — continues to grow. This year, he said, Cadillac will add 35 dealers in China, up from 180.
Cadillac is seeing success with younger buyers in China, said Uwe Ellinghaus, Cadillac’s global chief marketing officer, in a recent interview.
“Our customers are 34 years old on average, much younger than the German luxury makes,” he said. “These are people who want a distinctive American take on luxury.”
As Cadillac’s vehicle portfolio grows, de Nysschen expects U.S. sales “will again go beyond 200,000 a year.” Cadillac last reached that threshold in 2007.
Cadillac also this year is adding a plug-in hybrid version of the CT6 and later this year will launch its semi-automated Super Cruise technology — allowing a driver to take their hands off the wheel and foot off the accelerator in highway driving — on the CT6.
Analysts say Cadillac is at a competitive disadvantage given its lack of SUVs in the portfolio compared to other premium brands.
“While more SUVs are in the plans, they are playing catch-up and potentially losing customers — and much coveted premium brand loyalty — in the meantime,” said Bill Rinna, senior manager of LMC Automotive’s North American forecasts.
XT5 sales in the U.S. in December totaled 7,436, the second highest-selling luxury nameplate last month. GM is adding a third shift at the Spring Hill Assembly Plant in Tennessee in part to help boost capacity for the XT5.
The XT5 is expected to be Cadillac’s top selling U.S. vehicle this year and likely will be the second best seller in China behind the long-wheel base version of the ATS, Ellinghaus said.