Cadillac Readying Luxury Car, Convertible, and ATS-V

As you read this, Johan de Nysschen, Cadillac’s new president, is setting up his offices at GM’s Renaissance Center. He’ll likely engage in a more detailed version of the conversation we had with Cadillac executives this weekend in Pebble Beach. They discussed the state of the brand, what challenges lay ahead, and what new cars we’ll soon to see wearing the sleek new, wreathless crest.

Sticking to rear-wheel drive

The biggest assets Cadillac has are its brilliant-to-drive sport sedans, the ATS and CTS. Cadillac chief engineer Dave Leone calls them the “heart of the brand.” But neither car has performed to expectations in the U.S. market this year. Cadillac is having trouble explaining to owners of the last-gen CTS why they can no longer afford a new one. The ATS carries more incentives than Cadillac would like and faces pressure from the Mercedes-Benz CLA.

Indeed, Cadillac officials are impressed by, and perhaps a bit aghast at the success of the CLA, which transacts for not much less than an ATS despite having a lower base price and costing less to engineer. Mark Reuss, GM’s global product chief, recently confirmed Cadillac is looking at an entry-level competitor, while Leone, who also heads up development of rear-wheel-drive cars at GM, is categorical in saying the brand does not want a front-wheel-drive car at the base of its lineup. That leaves the possibility of doing something smaller and cheaper off of the same Alpha platform as the ATS and CTS. Doing this within an entry-level budget would be difficult—there’s a reason BMW, Audi, and Mercedes are using FWD for these models—but not impossible. GM initially planned on offering a cheaper ATS-size Pontiac entry on the Alpha platform, and Chevrolet has surely cut plenty of cost out of the platform for the next Camaro.

If Cadillac does introduce the new model (and perhaps even if it doesn’t) the next-generation ATS is likely to grow larger. Leone says the next ATS will also have better interior packaging—his team figured out how to move the large structural element that currently presses on the back of your legs when you sit in the back seat.

Over the coming months, we can expect to see the new ATS-V break cover, followed by the large rear-wheel drive sedan codenamed “LTS.” It’s likely to be renamed before it goes on-sale in late 2015. Leone also hints that Cadillac is working on a convertible. It could be a drop-top ATS, planned from the beginning but put on hold. Or it could be a successor to the Cadillac XLR, a car Leone still owns.

But the LTS is the make-or-break car. It hopes to earn credibility for Cadillac the same way Lexus got it in the early 1990s—by challenging the almighty Mercedes S-Class. Leone, who says he’s spent plenty of time in a Mercedes-Benz S550, promises the LTS will be one of the lightest and best-driving vehicles in the segment. It will employ a mix of materials--think aluminum, high-strength steel, and magnesium. Leone makes clear the car will offer a V-8, but is staying quiet on what kind of V-8 that will be. There had been some whispers months back that GM had revived development of a Northstar successor, but it seems unlikely to us that the company would, at this stage, invest in a new family of V-8 engines. Rather, we expect a version of GM’s small block along with the twin-turbo V-6 offered in the CTS Vsport. We also wouldn’t be surprised to see a 2.0-turbo offered as a base engine, at least in China. The LTS will also serve as Cadillac’s first foray into autonomous driving technology.

No El Miraj, for now

Last year Cadillac made a huge splash at Pebble Beach with the El Miraj concept (above). There was plenty of enthusiasm for it within GM. Cadillac marketing chief Uwe Ellinghaus called it “a no brainer…from a marketing point of view” when we interviewed him at this year’s Detroit auto show. Yet the big coupe is currently on hold. Given the extremely low sales such a car would generate, it could only have been justified as a brand-building exercise. And there are only so many brand-building exercises Cadillac can afford to do, Leone says. There’s also the sense that perhaps the brand needs to grow and build momentum a step at a time rather than shoot for the moon.

All that makes sense to us. However, we worry that the excitement the El Miraj generated could haunt Cadillac if it goes unfulfilled. We’ve gotten only the tiniest glimpse of the LTS, but brand officials admit it isn’t quite the dramatic statement that we saw in the El Miraj—how could it be without those massive 24-inch wheels and that low-slung roofline?

From ELR to Escalade

Cadillac is getting very little return on investment from its most recent attempt at a line-topper, the ELR. Former CEO Dan Akerson had pitched the car as GM’s answer to Tesla, but fewer than 600 of the plug-in electric coupes have left dealer lots through July of this year. Cadillac has not been involved in development of the next Chevrolet Volt, meaning the first-generation ELR is likely the last.

On the broader subject of green cars, Leone suggests more hybrid variants are in Cadillac’s long term plan, but also states very clearly that being the most fuel efficient luxury brand is not a priority. This plays to one of Cadillac’s big advantages over its European competitors when it comes to meeting Corporate Average Fuel Economy standards. Mercedes-Benz and BMW must meet CAFE on their own—or pay fines—because they sell relatively few volume cars to balance out the relatively thirsty luxury models. Even Audi carries a heavy load given that it accounts for more than 25 percent of Volkswagen Group’s sales in the United States. Cadillac, on the other hand, is but a speck compared to GM’s overall volume and thus is a very small component of its sales-weighted fuel economy average. Finding a few more mpg for the Chevrolet Silverado will do more for GM than any electric Cadillac. That also helps explain the decision to keep the 2015 Cadillac Escalade a body-on-frame truck, rather than turn it into a more efficient crossover. The new truck is doing quite well, by the way, and continues to haul in five-figure profit margins.

Getting the message across

The CTS’s stumbles at a higher price and the failure of the ELR to some degree reveal a lack of “brand health” Leone says. Ellinghaus agrees. The former BMW marketing chief wants to position Cadillac as a “bold,” “optimistic,” and distinctively American answer to the now ubiquitous Germans. Yet early attempts at delivering that message, namely through the Super Bowl ad “Poolside,” have been clumsy at best. Meanwhile, he says there’s not enough awareness of the new, performance-oriented Cadillac.

Upgraded leadership

The recall storm at General Motors presented a silver lining for Cadillac. In the midst of the crisis, GM called upon the brand’s global chief, Bob Ferguson, to head up lobbying efforts in Washington, D.C. That’s essentially the role he filled before former CEO Dan Akerson installed him at Cadillac in late 2012. The sense one gets from talking to people both within and outside the company is that Ferguson is smart and well liked but wasn’t qualified to run a luxury brand, particularly one in the midst of a turnaround. De Nysschen, who comes directly from Infiniti but is best known for his success at Audi, is definitely an upgrade. He will, no doubt, bring his own ideas about what Cadillac should be selling (he’ll probably be on board with the V-series cars given his enthusiasm for the Infiniti Q50 Eau Rouge). But he joins a team that seems to have a clear sense of where it wants to take Cadillac. The biggest remaining question is whether buyers will follow them there.

James Patterson
I know that GM brass is kind of busy with Congress at this time. However, the advertising for Cadillac is not acceptable. The ad agency that dreamed up the "Summer of Style" ads should be fired immediately. The monochrome white silver cars and the colorless backgrounds are not the stuff that dreams are made of. Additionally, low lease rates seem to cheapen the car. Advertise the vehicle in a way that emphasizes color and style. People want a car that they can be proud of. That includes dealing with their friends who do not understand the enthusiast mind set and know nothing about cars. Style will win those friends over. Why was Cadillac successful before? The doodads, gewgaws, color, style, and aura of desirability. Out with colorless, monochrome, basic, spartan looks. Get a style that matches the investment in the chassis and you will sell carsLastly, kick that horrible ad agency to the curb.
Cadillac has made huge strides, but they are not enough.  Too many of their cars are near-misses.  The ELR is flat-out ugly, it looks like Patton's dog. The design language is challenging, but often not beautiful. The interiors are gorgeous, the packaging is limiting.  Often there is a false note (excessive use of the crest and logos overall) that say 'brougham top' to the marketplace. Taste is uneven, not to the top standard consistently.  
To compete with Mercedes and Audi you need to provide a superior car for the money.  Not an 'almost-there' car at virtually the same price.  These cars either need to be cheaper, or much better than the competition at the same price point.  To move away from the safer choice of a Mercedes or Audi, you need a trumping argument or feature or price point.  Cadillac has none of these things.  It's a perfectly nice car in a segment that demands true leadership.  Look at what Tesla has done with an American car, using a GM designer, no less. Cadillac's need to be drop dead gorgeous, and better value for the money to win in this segment.  They currently are neither. 
Tocus Tocus
I don't see how a smaller entry level vehicle could hurt, but I also think that now the focus should be on the new lineup, ATS, CTS, and Escalade. The ATS, and CTS aren't selling like they should be, they really are the best cars Cadillac has EVER PRODUCED. Cadillacs really are better then any car BMW and Audi has to offer, Mercedes on the other hand offers luxury that no one has yet to match. If GM wants in on the compact luxury market, they really need to push the Buick Verano, give it a sharper sleeker look that's really aimed towards 25-35 yr old demographic. The Verano has the goods to fight the Germans.
Steve Lesem
OK, the Caddys are good looking and good cars.  However, the bean counters are in control.  It takes years to build a compelling brand, and it includes every aspect of the experience.   Caddy still feels somewhat entitled, until they are stripped bare, and start over, they will not succeed.  Give more car and more service than anyone else, do it over and over for years, and get back where you belong.  Right now you have a good car, but you dont have dealers and you want too much money.  Cut the price, fix the dealers, continue to make great cars, and you have a chance.  Get some discipline.  
Marc Hamady
The LTS will easily beat the overpriced overrated S-class.
Chris Prather
Who raised me? You're a fool. I have no idea? What do you do buddy? I work in the automotive field. I live cars. And I know what I'm talking about. The escalade is a Yukon with cue and different fenders. The only reason to buy one is because you are pretentious. They do nothing better and cost way more. The fact that they sell so good proves how stupid the American car buying public is. The cts/ats are the only "good" cars caddy builds. And my biggest problem with them is your can't get the best motor, manual and awd together. Take bmw. In a 3 series you can get either engine, either transmission and either drivetrain all mixed together. Choices. Caddy tells you that you don't get to choose because the car buying public is to stupid to know what they want. Offer a car built the way an enthusiast would want it and I will change my mind.
Bisher K. Numair
The ELR is an EV, it's clearly to boost the brand's green image and a 2nd generation isn't even under consideration. There is absolutely no need to spend a ton of money on such a new EV project especially knowing it won't be profitable. A new LTS sedan is on the way and the XTS which is based on a Chevy will be out of the picture. Plus it's ok to have Chevy based FWD cars to boost sales when offering other RWD, very competitive cars alongside. Lexus for example has 3 RWD sedan line up. And what is their best selling sedan? The ES a tarted up Camry previously and now a tarted up Avalon. BMW and Mercedes are going for some FWD models to boost sales, Infiniti is too, both Audi and Acura have been doing the same thing for years with performance AWD systems to compensate for the lack of RWD models.
Bisher K. Numair
What an absolute retarded way to discuss cars. Who raised you? Please stop talking about something you clearly have no idea about. Every sedan in their line up has no Chevy or Buick equivalent. The escalade is as differentiated from the Yukon and Tahoe as it could be and is the most successful of the trio. The SRX also based on a Chevy but definitely not a rebadge to call it a rich man's Chevy .
Alexander Stewart
Total Recalls...
Saif Mohammed
Loved the new escalade too
Evan London
The rear has a huge plastic center break light and two large plastic panels on either side of the license plant. Ugh. As for the interior, I did not comment on that. I can;t get past the ugly exterior.
Phoenix Fury
Danny Baker
Looks like a Lincoln!
Chris Prather
Just a dumbass^^^
Reasons why its not making it:1. Customer experience at a dealer does not match Audi, BMW, Lexus, Mercedes.  You get the same treatment as if you were purchasing a Chevrolet.
2. Customer experience at service does not match Audi, BMW, Lexus, Mercedes.  You get the same treatment as if you were purchasing a Chevrolet.3.  Power trains don't distinguish themselves from Chevrolet.4.  The instrument panel is not visibly appealing and CUE does not work ergonomically.
Steve Yelich
Cadillacs are the most beautiful, most luxurious and well-built American vehicles made and I love them.
Steve Yelich
Just a hater.^^^
Steve Yelich
Have you even been inside a new Cadillac? Apparently not.
Eric Klein
Put a stick in the ATS-V (and stock them at dealers), and I'd happily buy one. Of course, you'd have to put the money in my account, too.
Chris Prather
I do. Take the ELR at nearly twice the price of the volt. $90K plus esclades. The SRX is an overpriced trailblazer. Most models share either drivetrain or chassis( except ats/cts) with cheaper Chevys. SoYou do some research
Martin Edmonds
Plasticky in what sense? Also the cars look great.
Martin Edmonds
No. Not even close. Try doing some research first before saying such a thing.
Mahmoud Saeed Hammad
Jeff Stein
A CLA-fighter based off the Cruze perhaps? They can call it the Cimmer... Nevermind.
Matthew Lenz
On par, and in many respects better, with the best from across the pond.
Chris Prather
Overpriced Chevys?
Evan London
Hopefully they wont be as ugly as the cars they are currently making! Who know art and science meant slab-sided and plastic-y?
Van K
@Steve Lesem I don't believe cutting the price is going to significantly enhance their position. They are slightly lower for at least the same desirability. It will simply take another decade of performance for the market to catch up. In the automobile industry, inertia is a bitch. The Camry hasn't been the best vehicle in its class in many years, yet it's the consistent top seller. BMW still has a performance reputation despite the current stable of cars being more focused on luxury. Cadillac must continue offering better value and better vehicles and not expect an immediate turnaround. Reputation is neither lost nor gained in less than 3 vehicle life cycles.
yes as long as they build it and tell the bean counters to get lost!

Based on my experience with a CTS-V and the in-laws 3 Mercedes:1) There is an issue with Caddy dealership consistency.  I I personally haven't had a horrible experience, but have had some first world problems (car not clean, didn't spend enough time ensuring I was satisfied, had to come back) at a few.  Others are excellent.
2) I'd be as gracious as an MB dealer if every unexpected repair net me the cost of a low end used car :)  As the R350 ages the algorithm for estimating repairs is "80% of blue book".    I build cars for a hobby, and some of the service costs/explanations my inlaws have been given were jaw-dropping.  
@pg123456789  totally agree with you on the Dealership Experience. My ATS 3.6 is a fantastic car, but the service difference between Cadillac & Mercedes is enormous.  I have both and the difference is night & day. Caddy dealers are completely lacking in their attentiveness.  I recently replaced my wifes MB SUV and given that she loves the ATS 3.6 we considered the SRX.  However after 3 really awful experiences at the Caddy dealership, I simply wanted my wife treated better. We went with another GLK.  I also wanted my fluids checked and the car returned to me cleaner than when I brought it in. My local Caddy dealer returned my car filthy after I had an AC Service.... I was astounded.
Powertrains are fine, I like CUE and use it everyday. Its fun and cool and easy, once you learn it...
Its clear you've never driven any new Cadillac.  Why not go drive them and know vs thinking you know what you're talking about.... What Chevy? The Equinox & SRX have same platform but are vastly different, the Impala came after the XTS...Escalade is selling like hot cakes.... so what else you got?
Opinions are like....... everyone has one....
@xjug1987 @pg123456789 I noticed something My friend bought his Caddy (XTS) from an old line dealer who has been a Cadillac only dealer for 5 decades, service he said was phenomenal (previously he owned a Dodge). The other guy bought his at a multiline dealer (previous car was a Lexus) and he thought service was so bad he traded his CTS back to a Lexus when he got the chance. That is bothersome it shouldn't matter all. The Mercedes service centers I have been to were exemplary, sometimes a bit obnoxious but the service and the treatment was always very good to excellent.Cadillac probably has a dealer review program, perhaps they need to enforce it. 

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