The Wall Street Journal ran an article in which executives from General Motors Co.’s (NYSE: GM) Cadillac boasted that their sales in the United State would pick up enough to take market share from luxury vehicle competitors. That is unlikely for several reasons, among them the perceptions of the dependability and quality of its products.
In the article, the author pointed out one of Cadillac’s most glaring weaknesses:
“We owe it to ourselves to take a step back,” Cadillac U.S. marketing chief Don Butler said. “We are looking at everything go on in the brand and asking ourselves should it be structured differently.”
In part, that is because the about $38,000 and up ATS has gotten off to a slow start. U.S. dealers had a hefty 106 days’ supply of the cars as of the end of February. By contrast, BMW’s overall stock of unsold cars in the U.S. amounted to just 39 days’ supply.
Cadillac will have to address the consumer perception of its cars if it wants to make the kinds of gains it claims will be part of its future. New J.D. Power data show that Cadillac vehicles are measured below the national average for vehicle dependability among all brands. On a measurement of “problems per 100 vehicles,” Cadillac scores 128 against the industry average of 126. In the same study, the Lexus luxury division of Toyota Motor Corp. (NYSE: TM) is the clear winner. Also above the industry average are Ford Motor Co.’s (NYSE: F) troubled Lincoln and Honda Motor Co. Inc.’s (NYSE: HMC) Acura, as well as Mercedes-Benz and Porsche. BMW rates slightly below Cadillac.
Cadillac also does poorly in the TrueCar TrueTrends Brand Performance study for December, the most recent month of the measurement. Cadillac received a score of C. Based on this data, Lexus was at the top, again. Following it closely were BMW, Mercedes, Audi, Infiniti and Porsche. Once again, even Lincoln did better, while Cadillac received the same grade as downscale brand Kia.
Cadillac still holds a losing hand as it tries to advance closer to the top of sales among luxury brands in the United States.
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