Cadillac Sales Drop 11% as Brand Stumbles

Cars and Drivers

Published: January 6, 2015 6:43 am

Last Updated: January 6, 2015 7:04 am

Cadillac, the luxury brand of General Motors Co. (NYSE: GM), continues to be the laggard among luxury car brands. While sales of its primary competitors improve, Cadillac sales dropped 11% in December to 16,150.

Unlike Cadillac, its larger German competitors continue to add customers. BMW sales rose 11% in December to 41,526. Mercedes sales rose 4% last month to 37,297. Sales at Germany’s third-place luxury carmaker Audi were up 13.1% to 19,258.

Even battered Lincoln posted a December increase of 21% to 9,690, a signal that the Ford Motor Co. (NYSE: F) brand still has a heartbeat.

For some odd reason, Cadillac believes that if it moves from Detroit to New York City, its results will improve. Better to view the decision as Cadillac running away from itself. Commenting on the relocation of Cadillac’s headquarters, GM President Dan Ammann said:

With the relentless upward repositioning of successive new-generation Cadillac products, the next logical step is to provide Cadillac more freedom to cultivate the brand in pursuit of further global growth.

Freedom as a formula for success is hard to justify. What the move does do is put the U.S. Cadillac headquarters closer to those of Mercedes and BMW. The proximity probably will not help.

ALSO READ: Ford’s Sales Struggles Got Worse in December

Cadillac will base its near-term future on a new series of cars that are not very different from its current ones. Its 2015 ATS, CTS, SRX and Escalade still represent the brand’s line up. Sales of the CTS dropped 18% in December, and ATS sales fell 37%. Cadillac management cannot make a realistic case that the slide will not continue this year.

There is a persistent belief that GM is best off shuttering Cadillac. This could be done in favor of high-end, luxury versions of Chevy vehicles. Chevy’s SS sedan has most of the features of a luxury car and the top-end SS sells for $50,000. With upgrades, the SS could be a contender in the luxury category. And Chevy’s highest end Tahoe SUV could replace the Cadillac Escalade. The luxury version of the Tahoe sells for more than $60,000. With modest modifications, it could compete in the luxury SUV market.

Mercedes, BMW and Audi cannot be overtaken. Their technology is too good. Their brands are too strong. And they both introduce new models at speeds Cadillac cannot hope to match.

ALSO READ: Low Gas Prices Boost GM Sales 21% in December

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