General Motors Co. (NYSE: GM), which has a recent history of executives who put their feet into their mouths, managed to have that happen again. The world’s largest car company believes it can double the U.S. sales of Cadillac, its luxury brand, “within the next few years.”
Don Butler, the Cadillac vice president of marketing, remarked that parent company GM also wants to “restore Cadillac to be the standard of the world.” The luxury car division means to prove it can as it releases 10 new or updated models. No one bothered to tell GM that every other luxury car manufacturer with sales in America wants to double sales as well.
Cadillac still sits well back of the luxury car market share leaders in America — Mercedes, BMW and Lexus. Audi wants to muscle its way to the top echelon, and its growth indicates that it might.
GM has several challenges if it wants to overcome the sales advantages of its rivals. The first is that Cadillac buyers tend to be very old. That is not unusual because, until recently, Cadillac built cars that appealed to the over 60 group, but not to younger buyers. Only recently has it launched faster and more aggressively styled cars and light trucks. But its rivals have had those faster and more aggressively designed models for years.
Cadillac must also knock down the wall of the perception of luxury cars that are built by U.S. manufacturers compared to those built by firms based in Germany and Japan. Notwithstanding the advances American car companies have made in quality surveys, Mercedes, BMW and Lexus are not the sales leaders by accident. The perception, whether or not it is entirely accurate, is that they build better cars and offer better value. That perception is very hard to overcome, particularly because the leading manufacturers release new and “better” versions of their own products just as quickly as Cadillac does.
GM ought to let Cadillac sales speak for themselves over time. The prediction that Cadillac sales will double soon is arrogance that cannot be backed up by numbers.
Douglas A. McIntyre
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