Cadillac wants 500,000 sales by 2020, to double lineup
Cadillac’s new president said he wants the luxury brand to sell an “ambitious” 500,000 vehicles globally by 2020, and confirmed other vehicles are in the works: more crossovers and SUVs, a car larger than the big CT6 sedan coming next year, and a car smaller than the ATS.
Johan de Nysschen, speaking Thursday at the Barclays Global Automotive Conference, gave an overview for reorganizing the brand that includes doubling sales by the end of the decade from about 250,000 globally now. Much of that growth will come from China, where Cadillac will sell about 70,000 vehicles this year and a country in which de Nysschen wants to establish as a second hub of volume for Cadillac behind the U.S. But the plan also includes expansion in the Middle East and later in the decade in Europe. De Nysschen said Cadillac will add diesel offerings and right-hand drive models to help it enter and sell vehicles in markets such as Great Britain, Japan and Australia.
A slide in the Barclays presentation on future Cadillac cars shows 12 offerings in the future, including a small luxury car, a convertible, a compact and mid-luxury car, a large luxury car, two other compact/mid luxury cars, a small luxury SUV, a compact luxury SUV and two midsize luxury SUVs, plus the Escalade.
Today’s lineup includes six: the compact ATS and ELR plug-in hybrid, midsize CTS and XTS, and a midsize SRX SUV and the Escalade.
De Nysschen said U.S. sales could stay flat for three years under current plans that will keep incentives down and average transaction prices high. Cadillac’s U.S. sales are down 4.6 percent through October to 141,452 vehicles. But sales globally are up about 10 percent, largely from growth in China, General Motors Co. has said.
“We’re really going to prioritize the quality of business over the quantity of the business,” he said. “It’s very important that we build a solid foundation from which to grow. And if it means in the short-term we lose market share and we lose volume, then so be it.”
De Nysschen, who joined GM to run Cadillac late this summer after stints with Infiniti and Audi, is establishing a new Cadillac headquarters in New York City that could open in May.
He also confirmed plans to boost Cadillac’s operating margin from about 6 percent today to 10 percent by the end of 2020. He said Cadillac will offer an “even higher image building halo car” than the CT6 and vehicles that are more relevant for younger buyers. He stressed more crossovers and SUVs are coming.
“Something’s got to be wrong when a brand as iconic as Cadillac and part of the fabric of American culture has one crossover, one SUV,” he said. “The Germans have so many, we can’t even keep track.”
Changes to Cadillac’s 900-plus U.S. dealers also are part of his strategy. De Nysschen said Cadillac is working on a plan for “boutique stores” and will implement a business model with dealers that is performance-driven and rewards with bonuses.
He said “reorganizing” the dealer network at Audi cost about $170 million and it would not cost any less to do so with Cadillac. He said that would cost Cadillac about $40 million in 2015 and a marketing campaign for Cadillac next year will cost $100 million.
GM shuffles executives
General Motors Co. said Thursday it’s shuffling around a number of quality, purchasing, powertrain and connected vehicle executives.
The Detroit automaker said Alicia Boler-Davis, currently its senior vice president, global quality and customer experience, will replace Mary Chan as its vice president, global connected customer, once Chan leaves GM early next year to pursue other opportunities. Chan was hired in 2012 and has helped GM with its in-vehicle 4G LTE production.
Consequently, Grace Lieblein, GM’s vice president, global purchasing and supply chain will replace Boler-Davis. Both will report to CEO Mary Barra.
Steve Kiefer, GM’s vice president, global powertrain, will replace Lieblein. Dan Nicholson, executive director of powertrain embedded controls, will replace Kiefer. Both will report to Mark Reuss, GM’s president of North America.
All of the moves are effective immediately.