| To Caddy chief, luxury makers don’t share alike
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| By Jim Mateja, Chicago Tribune |
10/24/2003 |
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CHICAGO — Mark LaNeve says the luxury segment has a few pretenders.
"Lexus, Mercedes and BMW have greatly expanded their presence in the U.S. market. However, since 1999, 45 percent of all the new vehicles they’ve launched had a manufacturer’s suggested retail price of less than $35,000, and 70 percent of less than $40,000," said the general manager of Cadillac.
Lexus ranks No. 1 in luxury sales, followed by BMW, Mercedes-Benz and Cadillac at No. 4.
But, LaNeve points out, Mercedes sells a C230 sport coupe at $26,020, BMW a 325i at $28,495 and Lexus an IS sedan at $29,435. Each is counted as a luxury sale based on nameplate, not price.
By comparison, the lowest-priced Cadillac is the CTS sedan at $30,835.
"We’re in fourth place, but Cadillac, not Mercedes, has the highest sales at an MSRP of $40,000 and up," he said.
"DeVille has the highest sales of any vehicle at $40,000 and up and Escalade the highest of any at $50,000 and up," he added.
Thanks to its full-size sport-utility vehicles and Corvette sports car, Chevrolet has the highest sales of vehicles with MSRPs of $30,000 and more in the industry, yet no one considers Chevy a luxury nameplate.
So, are Lexus, BMW and Mercedes counting apples and oranges or is LaNeve adding sour grapes?
"They have more coupes and entry-level variants than we do. How viable are those segments, and do we need to be there? We have to look at for the future," LaNeve said.
Because entry-level luxury cars get consumers started in the family where they traditionally will move up to higher-priced models, it wouldn’t hurt Cadillac to consider a CTS coupe. That would provide the basis for a CTS convertible as well.
"In 1992, domestics had a 55 percent share of the luxury market and imports had 45 percent; one decade later, domestics have a 27 percent share, imports grab 73 percent. We obviously want to win back market share, but we’re not going to do it by coming in with sub-$30,000 cars. We’re not going to grow volume at the sake of exclusivity," he added.
OK, make it a $35,000 CTS coupe and convertible.
There’s been talk about additions to the Cadillac lineup that would include a big rear-wheel-drive $75,000 sedan to compete against the S-Class at Mercedes, as well as exotic V-12 and V-16 versions, high-performance offerings at $125,000 to $200,000 that would contribute to Cadillac’s prestige, not to mention profits.
"We’re still exploring the possibility of a Cadillac ultraluxe sedan that picks up some of the great drama exhibited in the Cadillac Sixteen concept car, or a supercar like the 750-horsepower Cien concept that we showed at last year’s auto shows. Either would be a great addition and true to Cadillac’s heritage of ultrapremium, ultraexclusive, almost unobtainable models," LaNeve said.
"We need to get into the one-of-a-kind ultraluxury segment because products like that would greatly enhance our image," LaNeve said.
Hmm.
Several years ago Mercedes-Benz vowed it would focus more on cars that cost $50,000 and more rather than $50,000 and less and in doing so be the pre-eminent luxury-car nameplate.
But it wasn’t until Mercedes replaced its entry-level 190 sedan with the new C-Class in the 1994 model year that its fortunes took off in the United States as more folks were introduced to the nameplate with an affordable sedan.
While LaNeve provided a brief glimpse into Cadillac’s future, he spent most of his time during a visit with the Midwest Automotive Media Association reliving the past, and the troubles that have plagued GM’s luxury marque.
"Up until a few years ago, Cadillac dominated the market as the No. 1-selling luxury brand in America. But for various reasons, not the least of which was a lack of focus in both our products and marketing strategy, we lost our leadership, lost our relevancy to baby boomers and now we’re fighting hard to win it back," he said.
"We’re making great progress. We’re on track to hit annual sales of over 200,000 units in ’03 for the first time since 1994 (210,686)," he said.
"We’re only 6,000 units behind Mercedes-Benz nationally," he said, noting the chance to pass Mercedes and secure third place in luxury-car sales.
"We’ve turned the corner, we’re moving in the right direction, but we have more work to do. A lot of justifiable skepticism still remains," he said.
Cadillac has been on a path to reposition the brand as a premium luxury make since 1999, when it lost the luxury sales crown to Lexus.
"I don’t look at it as Cadillac being fourth in sales now, but rather that since 2000 we’ve moved up from sixth place past Lincoln and Acura," he said.
Speaking of movement, Cadillac might re-enter racing. It last competed with a prototype car in the American Le Mans series in ’02.
"We’ll have an announcement about that in the fourth quarter. If we do, I can tell you we’d race what we sell," he said.
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