Should Cadillac STOP Focusing On Cars And Start Churning Out BETTER SUVs At A Greater Volume?

Today there was a particularly good user submission thanks to a Spy, USNA1999. It linked to a Yahoo Finance story that essentially discussed the problems going on as Cadillac is attempting a renaissance with a product portfolio offensive.

Now though the CTS isn't getting that much love and the ATS isn't exactly a class leader. They're moving off dealer lots thanks to deep incentives while the Escalade commands extremely high prices AND is not encountering any problems selling units. Here's the funny thing: the Escalade isn't even a great product for what it costs.

This got us thinking a bit. WHY doesn't Cadillac start betting more on SUVs that it can actually sell with less incentives over its sedans?

- Where is a Land Rover Discovery Sport or Mercedes-Benz GLA-Class competitor?
- How far away is an SRX replacement that can really take down the Lexus RX and German trio?
- How about a competitively priced three-row SUV priced at $55-60,000? THINK: Infiniti JX.
- Can the company actually make the Escalade a jaw droppingly good product instead of what's essentially a warmed over pick-up truck?

Would THIS be the answer to the company's renaissance? OR, should it stick to the current strategy of building also rans in the sedan category that need deep discounts to get them off dealer's hands?

**Read the Yahoo Finance story here!

...Even though chrome-bedecked Escalades retailing for more than $100,000 each are rolling every day out of an Arlington, Texas, factory that's been working weekend overtime for months, Cadillac still can't keep more than a few weeks' worth of the big SUVs in stock. By contrast, its dealers are offering discounts of thousands of dollars on the ATS sedan, intended to compete with the BMW 3 series, and on the CTS sedan, meant to rival the Mercedes E-class.

At Brotherton Cadillac Buick GMC in the Seattle suburb of Renton, Washington, owner Brad Brotherton is offering 2014 ATS sedans at up to $12,000 off a sticker price that starts at about $33,215. In St. Peters, Missouri, near St. Louis, Bommarito Cadillac was cutting as much as $17,500 off the price of a 2014 CTS sedan, which starts at about $45,345...

runninglogan1 - 2/11/2015 1:03:48 AM

+2 Boost

In a word, no.

Car4Life - 2/11/2015 9:30:41 AM

+1 Boost

Agreed, Cadillac can not afford to stop focusing on any market or product, but lets be honest. Cadillac just produced two fantastic sedans, the ATS and CTS, both receiving rave reviews and coming out on top or taking a close second in many comparison test however, they have not been able to put a dent in Benz/Bimmers market share on luxury sedans.

The SUV market, however, is a different story and is pretty much anybodies game at this point. Perhaps an emphasis on more sophisticated, performance oriented, and functional SUV's at the compact crossover, mid sized, and performance high end SUV segments may not be such a bad thing for Cadillac. With improving fuel efficiency, SUVs have become more appealing over seas as well.

I think it may be easier for Cadillac to break in and gain significant market share with SUV's attracting more consumers to their showrooms and making new buyers more likely to test drive a Cadillac sedan to compliment their SUV.

Time will tell.

MDarringer - 2/11/2015 8:30:21 PM

0 Boost

In a word YES! Rushing credible responses to the BMW X3, Lexus RX, BMW X5, Mercedes GLE, Porsche Cayenne, and a replacement for the Escalade that is Mercedes GLS worthy would be a brilliant strategy that would (1) boost sales a lot, (2) create profit, that (3) could be poured into a coherent sedan strategy.

cidflekken - 2/11/2015 1:58:34 AM

+1 Boost

The first response is NO.

But it's a fair point of discussion. Both the Escalade and SRX are pretty successful in their respective classes, for obviously different reasons.

I think Cadillac should continue to expand their SUV lineup and while continuing to figure out how to fix their sedan/coupe lineup.

jeffgall - 2/11/2015 6:54:42 AM

+1 Boost

Agreed. Cadillac desperately needs a 3 row cross over to compete with the X5, Q7 and XC90

TomM - 2/11/2015 8:29:36 AM

+1 Boost

Actually - Cadillac does not currently have a choice - they are stuck with the ATS and CTS - and will have to sell them at a deep discount - until they are replaced with cars that are of sufficient size to lead their classes in interior room - which is what China and America (Their largest markets) want. The original CTS sold because it was the leader of interior space at the price point. The ATS (in the same price point)trails the pack - and sales have floundered.

AS far as SUV's, the Escalade is new - and appeals to the Market that Cadillac abandoned - Americans wanting LARGE vehicles. DeNysschen must be squirming in his grave!. But - it just shows that American WILL pay the bucks - if YOU give them their Large Luxurious vehicles.

Cadillac still needs to add at least two more Suv's = a Large and Mid size Crossover.

And Cadillac needs to lead in Interior space in each class - The ATS should be priced to compete with the CLA - the Cts should move down to compete with the Cclass/3series/a4 - and the new CT6 should be priced in the 5/e/a6 range - and you would see Cadillacs finally compete in sales

cidflekken - 2/11/2015 3:58:08 PM

+1 Boost

You hit on several very cogent points.

First, if Americans want big and luxurious, they go the SUV or pickup truck routes. They no longer want the Cadillac of old. Further proof is the good, but not great, sales of the Chrysler 300.
And that's a perfect segue to another point which is price. The Chrysler 300 has seen good success, especially its first generation, mainly due to its price point. As you stated, the previous two CTS were pretty successful because they offered, for the most part, a luxury midsize car at a compact luxury price. Now, Caddie is trying to go head to head in size and price and I just don't think consumers view Caddie at that level, at least not yet.

PUGPROUD - 2/11/2015 8:43:10 AM

+3 Boost

Cadillac needs to return to its American roots whether its cars or SUV's...elegant styling, imposing road presence, torque and more torque, beautiful big interiors, quality materials. Stop chasing the Germans and Japanese...be American and be proud of it. Make every Cadillac an occasion that lifts the spirit and the senses. Let the Germans and Japanese have cold calculating efficiency. Cadillac should counter with elegance, design, warmth,and power. Stop making Chevrolets into Cadillac's. Leave Chevrolet and Buick to address the mass markets with Cadillac being the American Bentley at a slightly lower price point. Think maximum profit per vehicle versus mass sales at lower
margins.

FormerBenz - 2/11/2015 11:37:42 AM

+1 Boost

Best comment here!

Benzes1 - 2/11/2015 4:18:23 PM

+1 Boost

That is what the new guy wants to do, but he doesn't have the vehicles in place to do it. It would take another 10 years to put that strategy in place. GM isn't going to wait that long. All GM knows is volume.

mre30 - 2/11/2015 10:39:53 AM

+2 Boost

I have heard stranger ideas and in this economy, a company should not be anchored to its legacy. Roll the clock back 15 years - who would've thought that Kodak, Polaroid, IBM, Lotus, among other firms would be basically out of their traditional businesses.

I think the best analogy for Cadillac is what happened to Jaguar/Land Rover. Have your own opinions about Jaguars, but the smashing SUV success of Land Rover/Range Rover is what allows Jaguar to remain floating along on life support.

Cadillac is alone amongst the luxury volume automakers to NOT have a coherent SUV strategy. Perhaps they should refocus on SUV's (having the Escalade at the top); a mid-sized three row one - based on the GMC Acadia; a new SRX (which is a fine SUV at its price point); and then a small SUV to complement "reduced-expectation" (i.e. lower sales volume) ATS, CTS, and XTS/new big sedan.

If Cadillac wants to sell in any volumes, that is the strategy it should pursue.

Hell, even Porsche has a broader SUV strategy than Cadillac and I'd argue Volvo has a BETTER SUV strategy than Cadillac.

Just my two cents!

Benzes1 - 2/11/2015 11:28:20 AM

+1 Boost

NO, that would be the dumbest thing ever. You're going to bet the whole brand on cheap gas and SUV sales? It would be suicide.

TomM - 2/11/2015 4:32:20 PM

+1 Boost

Agreed - they do need more SUVs - BUT what they really need is to back to their AMERICAN roots and produce Prodigious Luxury Vehicles - not tiny little sports sedans with no trunks and no rear seat room.

Fact is - their markets are china and Usa - and we prefer roomy, strong, silent - boulevard drivers -

If Cadillac produced a new FULL SIZE car that had more room than the Mercedes S class - and sold in the Escalade price range - they would have an entire market to themselves - the LUXURY car market.

joescuba - 2/11/2015 8:59:18 PM

+1 Boost

Cadillac needs to retool its complete car line up. GMC is the truck company of GM so let it be. The Escalade is a fine vehicle but Cadillac is not a truck company.
The ATS, CTS are pretty boring look a likes. and the CT6? who knows money says just another CTS.
They need a real American car guy. Stop trying to be AUDI or BMW Get back to building a full sized America Luxury Car. Become the "Cadillac" of luxury cars. A car that will sit 3 NFL lineman in the back seat comfortably then they will be on the right track. The idea of a hotrod Cadillac needs to go away.

skytop - 2/12/2015 4:09:32 AM

+1 Boost

Cadillac management is lost and shows no cohesion or direction.