GM's Cadillac at a crossroads
Credit: Reuters/Carlo Allegri
A Cadillac logo is pictured at the Jacob Javits Convention Center during the New York International Auto Show in New York April 16, 2014.
De Nysschen will have more autonomy and authority than previous Cadillac chiefs. He may need it.
In a rising U.S. car market, Cadillac is being pummeled by the German luxury marques, which have blanketed the sector with mainstream and niche models and are outselling their Detroit rival by 2-1.
GM has labored for years to rebuild Cadillac into a global brand, but it has constantly stumbled to re-establish Cadillac's stature in its home market.
De Nysschen needs to douse several fires immediately that have bruised the brand's image. There are too many cars sitting on U.S. dealers' lots, and yet not nearly enough of the right products to blunt the Germans' assault. He also must contend with heavy discounting by Cadillac dealers, including up to $20,000 off the 2014 ELR electric coupe. On top of that, the company has issued a plethora of safety recalls this year on virtually every model that is currently available in Cadillac showrooms.
These and other issues have fueled a revolving door at the top of Cadillac. De Nysschen was recruited from Nissan Motor Co Ltd's Infiniti brand to replace Robert Ferguson, who this week was named GM's senior vice president of global public policy.
Ferguson had headed Cadillac since October 2012. His predecessor, Don Butler, departed GM last August, two weeks after the company dismissed Cadillac sales chief Chase Hawkins.
Cadillac dealers on Friday said the brand needs two things to succeed: Consistency of leadership and the opportunity to function as a stand-alone entity within GM.
Howard Drake, owner of Casa de Cadillac in Sherman Oaks, California, and a member of Cadillac's national dealer council, said the brand needs 'its own team, its own resources, its own profit and loss accountability.'
'Cadillac is struggling with some brand perception issues and Johan is a master brand builder,' Drake said, adding that GM President Dan Ammann told dealers he plans to give de Nysschen 'a lot of autonomy.'
One of the new guy's first tasks will be to revamp Cadillac's sales and marketing efforts. Through the first six months, the brand saw U.S. sales fall 2 percent to 82,117, while BMW rose 12 percent to 157,382 and Mercedes 8 percent to 163,107.
Further, the two premium German brands are having trouble keeping enough product on dealers' lots. Cadillac dealers have not had that problem, with an average four months' worth of unsold cars, including nearly three years' worth of the pricy, battery-powered ELR, which was launched just six months ago and has been purchased by only 390 customers.
Sales of Cadillac's lowest priced model, the ATS sedan, also have slumped 22 percent this year, despite dealer discounts of up to $6,000. Voted North American Car of the Year in 2013, the ATS has been on the market less than two years.
BMW and Mercedes also cover the premium U.S. market with a dizzying variety of products - two for every one sold by Cadillac. BMW's U.S. models sell for $33,675 to $142,125, Mercedes' for $30,825 to $275,925. In comparison, Cadillac's relatively limited range is priced from $33,990 to $86,790.
Cadillac is getting several new products designed to broaden its appeal, especially to luxury European buyers.
The most notable of the future Cadillacs is the LTS, a flagship sedan due in late 2015 and aimed at the BMW 7 Series and Mercedes S-Class sedans.
Cadillac also plans to add a small crossover in late 2017 that is targeted at the BMW X3 and the Mercedes-Benz GLA, supplier sources said.
As the products are rolled out, Cadillac must recast and hone its marketing and advertising themes, executives said.
'There are no great brands without great products,' said Cadillac's Chief Marketing Officer Uwe Ellinghaus, a former BMW marketing executive, but 'even the greatest products in the world do not sell by themselves.'
Rebuilding the brand's image and Americans' perception of it could be the biggest challenge for de Nysschen and his team, according to a former top GM executive.
'Cadillac has had trouble figuring out who their audience is,' he said. 'I hope they give de Nysschen the authority and leeway he is going to need.'
(Reporting by Paul Lienert in Detroit; Editing by Lisa Shumaker)
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