New Cadillac SUV likely to debut at LA Auto Show

Melissa Burden
The Detroit News

New York — The Cadillac brand, which showed its top-of-the-range CT6 sedan last week in New York, plans to reveal its next-generation SRX SUV this fall and will add a small car to appeal to millennials by the end of the decade.

Cadillac likely will show the SRX — which will get a new name beginning with XT for Crossover Touring and a number to pinpoint its size in the lineup — in November at the Los Angeles Auto Show. Many analysts expect it will be called the XT5.

"We are pretty confident that in our next generation of car, we take and leverage what already has been an outstanding product success for us, and infusing it with more advanced design, particularly newer technologies, we will be highly competitive," Cadillac President Johan de Nysschen said.

The SRX is Cadillac's biggest seller in the United States, with 53,578 vehicles sold last year. Even so, sales of the luxury compact crossover were down 5.6 percent from 2013 and sales of the SRX through March this year are down 17.5 percent to 12,294 vehicles.

Competitors include the Lexus RX, which has been redesigned for the 2016 model year and sold double the number that the SRX did last year, and the Acura MDX and RDX and Audi Q5.

While Cadillac plans eight new vehicles including new SUVs by the end of the decade as part of efforts to rebuild the 112-year-old brand, those new SUVs for Caddy won't be available for a few more years.

"Cadillac's current SRX is one of the oldest products in the segment," Akshay Anand, analyst for Kelley Blue Book, said in a statement. "The XT5 is part of Cadillac's new nomenclature, and will need to provide some serious features if Cadillac continues to hope to eat into share of the luxury leaders." senior analyst Jessica Caldwell said the SRX has done well for Cadillac, but it needs to establish more of an identity.

"I bet they wish they had the car out now," she said. "It's just the right time for that market at this point."

Caldwell said Cadillac needs to focus on more SUV offerings while the market demand is so hot for smaller SUVs. "They need to get a core product out rather than focus on more niche segments," she said.

De Nysschen said Cadillac also needs a point of entry that is cheaper than the ATS, which starts at about $33,000. He said such a car is in the works.

He disagreed with Mark Templin, executive vice president of Lexus International, at the J.D. Power/NADA U.S. Automotive Forum event ahead of the New York auto show last week. Templin said Lexus doesn't plan to have an offering like that of the Mercedes-Benz CLA and Audi A3, which begin at around $30,000.

"I don't think we can build a car with the quality and craftsmanship and the content that we put in a Lexus and build it profitability for $30,000," Templin said. "We don't have a desire to build cheaper cars. That doesn't mean we won't build a smaller car at some point in time, potentially."

De Nysschen said a lower-priced entry will help meet needs of luxury brand buyers. Cadillac says that by 2020, 80 percent of auto luxury consumers will be from generation X and millennial groups.

"If our esteemed colleagues at Lexus believe that with a Toyota Camry they can cover that segment, I say good luck to them," de Nysschen said.

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De Nysschen assembles New York team

Cadillac President Johan de Nysschen is busy assembling his team as the company gets ready to open its headquarters in New York. He recently hired Andrew Lipman from Audi of America as director of global communication, and Andreas Schaaf is joining Cadillac in July as vice president of Europe. Schaaf comes to Cadillac from BMW AG.

Executives will move into the luxury brand's new space on top floors of a Hudson Square building beginning in June, with plans to be fully operational by September, de Nysschen said in an interview last week at the New York International Auto Show. He said he expects the office will house 140 people-plus by the end of 2015.

Cadillac is in the process of hiring for key positions including a lead executive to oversee Cadillac in China, de Nysschen said. Much of the luxury brand's growth, aimed to double sales by 2020, is expected in China which de Nysschen has said he wants to become a second volume hub behind the United States.

"Our focus now is staffing up the next levels in the U.S.," de Nysschen said.

Cadillac has about two dozen job postings for its New York office, including manager jobs in planning, dealer network, customer experience, corporate strategy, events and auto shows, forecasting, marketing, and research. GM is redesigning its Cadillac business and it will operate as a separate business unit.

Melissa Burden