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Cadillac’s Problem of the Cars It Can’t Sell

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Old 06-28-16, 08:09 AM
  #166  
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Originally Posted by BrownPride
Anybody who willingly purchases a GM product should know that their resale values are lower than the competition. They took the risk.
I would relax on the comments about resale value. GM cars have never really excelled at resale. GM has a higher average transaction rate than the industry and some of their vehicles are nicer than what Lexus and Toyota are offering. I was looking at some of the GM vehicles, the Sierra Denali is selling for a much higher MSRP than Toyota has ever been able to achieve with Tundra, the Escalade is far more successful than the LX570 and they both sell for about the same price.

So it is not all doom and gloom for GM. I personally would not buy a GM product, but I would lease one if the time was right.
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Old 06-28-16, 08:52 AM
  #167  
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Originally Posted by LexsCTJill
I would relax on the comments about resale value. GM cars have never really excelled at resale. GM has a higher average transaction rate than the industry and some of their vehicles are nicer than what Lexus and Toyota are offering. I was looking at some of the GM vehicles, the Sierra Denali is selling for a much higher MSRP than Toyota has ever been able to achieve with Tundra, the Escalade is far more successful than the LX570 and they both sell for about the same price.

So it is not all doom and gloom for GM. I personally would not buy a GM product, but I would lease one if the time was right.
But this is exactly the point... to offer competitive leases, GM needs strong resale/residual values so that they're not spending an arm and a leg in marketing support to bring the lease payment to a competitive monthly level.

Everyone knows that GM trucks are vastly more competitive within their segments than their cars have been, so yes the Sierra Denali and Escalade can command strong premiums and still achieve good sales results.

Cadillac is making a pretty big move in terms of repositioning the pricing of the ATS downward while adding more content at the same time. As to whether its enough to make the market notice? That's to be determined. It's likely a bit too late for this generation of ATS. Hopefully they don't rebump the price with the next gen CT(insert new number here) with the same hubris and start the cycle all over again.
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Old 06-28-16, 03:11 PM
  #168  
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Originally Posted by bitkahuna
not sure why this new article is using such old data (2014vs2015) but cadillac is still definitely a work in progress regarding sales, but basing an analysis simply on how long product sits on the lot doesn't tell the whole story. wouldn't surprise me if cadillac dealers are heavily pressured to take on too much inventory. contrast this with lexus dealers that never seem to have enough so if a dealer has more inventory than they want and there is demand for then of course it's going to sit there a long time.

Simple answer; because 2016 is not yet over, cars are still being sold now in 2016. So they used 2014-2015 stats. Anyway, what they should also include is how many units they sold across the States and compare those as well, that would help us get a better picture.

the ats is a great vehicle, but the cue system criticism and brand 'image' have definitely made it challenging to sell. the cts is a decent vehicle too, and the cts-v is world class, but it's still definitely a difficult sell against the german 3 and lexus. cadillac will need to do something bolder, not lowering prices, but something on the product or service side or even sales process.

Can't say I don't love the ATS...the new ATS-V has got me all wide eyed and drooling . A stickshift twin turbo sedan?! It doesnt get any better than that. As soon as I found out it had a manual transmission option I was sold! Don't get me wrong a brand new 2017 RC-F would be sweet too.. but it only comes automatic with paddle shift. Nothing like a proper 6 speed manual gear box

the ct6 is world class and the new xt5 seems excellent also, so these and other improvements will hopefully elevate the brand some in the next few years.
Don't count Caddy out yet! The ELR while clearly a watered down Cadillac Cien, its still definitely a head turner in my opinion, but should have offered a gas engine variant.. A price tag of $57,000 is also a deterrent.. A 2.0T model with about 230hp and a 3.6L V6 model with about 330hp would have been a superb addition to the lineup maybe even an ELR-V ?? dump that ATS-V twin-turbo 3.6L V6 engine in there and BAM a whole new sports car, coupled with that 6 speed manual option and BOOM you got yourself an enthusiasts car. Sporty yet elegant and different from anything else on the market.

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Old 06-28-16, 04:09 PM
  #169  
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Originally Posted by DreamGS4
Don't count Caddy out yet! The ELR while clearly a watered down Cadillac Cien, its still definitely a head turner in my opinion, but should have offered a gas engine variant.. A price tag of $57,000 is also a deterrent.. A 2.0T model with about 230hp and a 3.6L V6 model with about 330hp would have been a superb addition to the lineup maybe even an ELR-V ?? dump that ATS-V twin-turbo 3.6L V6 engine in there and BAM a whole new sports car, coupled with that 6 speed manual option and BOOM you got yourself an enthusiasts car. Sporty yet elegant and different from anything else on the market.
...Not sure if serious....
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Old 06-28-16, 06:33 PM
  #170  
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Originally Posted by LexsCTJill
I would relax on the comments about resale value. GM cars have never really excelled at resale. GM has a higher average transaction rate than the industry and some of their vehicles are nicer than what Lexus and Toyota are offering. I was looking at some of the GM vehicles, the Sierra Denali is selling for a much higher MSRP than Toyota has ever been able to achieve with Tundra, the Escalade is far more successful than the LX570 and they both sell for about the same price.

So it is not all doom and gloom for GM. I personally would not buy a GM product, but I would lease one if the time was right.
Fair enough point, I should have been more specific because their trucks have high resale values. The rest of the lot...not so much.
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Old 06-28-16, 06:39 PM
  #171  
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Originally Posted by DreamGS4
Don't count Caddy out yet! The ELR while clearly a watered down Cadillac Cien, its still definitely a head turner in my opinion, but should have offered a gas engine variant.. A price tag of $57,000 is also a deterrent.. A 2.0T model with about 230hp and a 3.6L V6 model with about 330hp would have been a superb addition to the lineup maybe even an ELR-V ?? dump that ATS-V twin-turbo 3.6L V6 engine in there and BAM a whole new sports car, coupled with that 6 speed manual option and BOOM you got yourself an enthusiasts car. Sporty yet elegant and different from anything else on the market.
Cadillac is trying to create inroads into a saturated market where they are late to the party. Alfa Romeo made a really great driver's car with the Giulia but I and many automotive analysts guarantee it won't be that hot of a seller, because like the ATS (which is a decent car to drive) the Giulia falls short in all other criteria that buyers look for. That's exactly what happened with the ATS, GM built a car that automotive journalists would like but not that consumers like. I am an avid BMW guy and am disappointed by the F30s I've driven (although the refreshed ones are better), but there's no denying that BMW knows this market as they practically invented it and have set the bar for generations. GM didn't think about ergonomics, interior design and quality, infotainment, or rear seat passenger room when building the car. They thought they could out BMW BMW by just focusing on driving dynamics. They forgot that people don't just buy BMWs because they drive better than competitors, but because they are excellent all-rounders. Aside from reliability concerns, BMWs are arguably some of the most well-rounded luxury cars year after year.

So yeah, on paper what you're saying sounds nice but I (a) don't trust GM one bit to pull off a good all-around car and (b) Cadillac does not have the brand equity to lure buyers from German brands and Lexus. in fact, I read yesterday that the overwhelming majority of ATS customers previously owned another GM product or a Ford. It hasn't attracted any buyers from the German brands, Lexus or Infiniti. Things are only looking worse for the ATS with a refreshed 3er and IS out, new C-class, new A4, and a solid offering in the Q50. They raised the price like $1,500 on their "base" model now (which I believe is the 270 hp engine), making it like $3,000 more expensive than the anemic 320i BMW. Guess which one your average consumer is going to buy? I bet it will still be the Bimmer despite the power discrepancy.

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Old 09-25-16, 08:33 PM
  #172  
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Default Cadillac Wants To Close 40 Per Cent Of Its U.S. Dealerships



Cadillac is offering over 40 per cent of its U.S. dealerships pay outs to close down.

Automotive News reports that the brand's 400 smallest U.S. dealers are being offered up to $180,000 each before Cadillac imposes a selection ofnew standards across its sales network.

The dealerships being offered these pay outs all sold fewer than 50 vehicles throughout 2015, meaning that while they represent 43 per cent of all U.S. Cadillac dealerships, they only accounted for around 9 per cent of 2015's sales.

The move comes as Cadillac prepares to implement 'Project Pinnacle' on January 1, 2017. The program will drastically alter how the brand distributes incentives to its dealer network based largely around sales volume. The most successful dealers will have to meet strict new guidelines while smaller outlets will have more relaxed guidelines but won't be able to stock Cadillac vehicles on-site.

Speaking of the move, Cadillac president Johan de Nysschen said “This is going to be a long, arduous and challenging journey and certainly not one for the faint-hearted. Some people may choose to make life a little easier than what lies ahead.”
http://www.carscoops.com/2016/09/cad...r-cent-of.html
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Old 09-25-16, 08:37 PM
  #173  
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Good move on Cadillacs part. They have way to many dealers. It's a tough decision to do something like this but in the long run it will benefit the brand.
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Old 09-25-16, 09:12 PM
  #174  
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Originally Posted by LexsCTJill
Good move on Cadillacs part. They have way to many dealers. It's a tough decision to do something like this but in the long run it will benefit the brand.

I'm not are that there really are too many Caddy dealers. Even here in Northern Virginia, one of the most lucrative new-car markets in the country outside of Southern California, there are only two Caddy dealerships within reasonable driving distance. If they DO decide to downsize the number, though, maybe the best thing for some of them would be to convert to Lincoln. Lincoln's current dealer system, IMO, is a joke.....selling out of only selected Ford/Lincoln shops. Lincoln could use some stand-alone dealerships.
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Old 09-25-16, 09:31 PM
  #175  
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Originally Posted by mmarshall
I'm not are that there really are too many Caddy dealers. Even here in Northern Virginia, one of the most lucrative new-car markets in the country outside of Southern California, there are only two Caddy dealerships within reasonable driving distance. If they DO decide to downsize the number, though, maybe the best thing for some of them would be to convert to Lincoln. Lincoln's current dealer system, IMO, is a joke.....selling out of only selected Ford/Lincoln shops. Lincoln could use some stand-alone dealerships.
Cadillac has 925 dealers. That is 3.5 times as many as Lexus and they sell roughly half as many cars.

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Old 09-26-16, 06:07 AM
  #176  
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I wonder how many of those dealers they are asking to close are in rural areas that are already selling other GM brands. First dealer that comes to mind as my parents hometown dealer and they live in an extremely rural area. The local dealership sells all GM brands, but looking at their website today they have a whopping 4 Cadillacs on the lot. It would have been 5, but my mom purchased their one and only SRX when GM had inventory cleanout incentives (walked away with brand new luxury collection SRX with 10 miles, 20% off MSRP and 0% interest for 72 months). Their lone Escalade has been on the lot for months. I almost actually bought it at a steal of a price but we could not get an early exit to my RX lease to make any financial sense.

But point being, in these rural areas - they very rarely have options outside of Cadillac or Lincoln. My parents could purchase a Lexus of course, but then they are driving a minimum 1 hour to service or have anything done to the vehicle. But I get that is not really the strategy that Cadillac wants to try and bank on long-term, it obviously has not worked well outside of a couple of models for them.
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Old 09-26-16, 06:13 AM
  #177  
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Those are exactly the dealers they're targeting, as the article said dealers that sell less than 50 Cadillacs a year.

The reason for this is they're about to require big upgrades to dealers and they're trying to create an easy exit path for small dealers who won't be able to afford the improvements. This is not that uncommon for franchises, McDonalds did this when they rolled out their new renovations, hotel chains do this a lot when they do big network wide changes and improvements.
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Old 09-26-16, 06:25 AM
  #178  
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Originally Posted by LexsCTJill
Cadillac has 925 dealers. That is 3.5 times as many as Lexus and they sell roughly half as many cars.
Frankly, for the volume they do, and the comparison ratio that you state (at least here in the D.C. area), I don't think it's a question of Caddy having too many dealerships as Lexus simply not having enough. Of course, I also realize that this D.C. area, with its immense wealth, is not indicative of what car sales (especially luxury-car-sales) are like nationwide. Indeed, not many miles west and southwest of here, in the Appalachians, many people are driving rusted old pickups.

Also, before we try and gauge the number of dealerships Caddy will need in the future, let's wait and see how the CT6 and XT5 sell (along with the upcoming compact XT3 CUV, which is likely to be a hit). Both, IMO, are substantially better products than the unimpressive XTS and SRX they they replaced...and probably deserve to sell more.

Last edited by mmarshall; 09-26-16 at 06:29 AM.
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Old 09-26-16, 06:30 AM
  #179  
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Originally Posted by mmarshall
Frankly, for the volume they do, and the comparison ratio that you state (at least here in the D.C. area), I don't think it's a question of Caddy having too many dealerships as Lexus simply not having enough. Of course, I also realize that this D.C. area, with its immense wealth, is not indicative of what car sales (especially luxury-car-sales) are like nationwide. Indeed, not many miles west and southwest of here, in the Appalachians, many people are driving rusted old pickups.
Not many old rusted cars and trucks in th DC area, eh?
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Old 09-26-16, 06:38 AM
  #180  
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Originally Posted by mmarshall
Frankly, for the volume they do, and the comparison ratio that you state (at least here in the D.C. area), I don't think it's a question of Caddy having too many dealerships as Lexus simply not having enough. Of course, I also realize that this D.C. area, with its immense wealth, is not indicative of what car sales (especially luxury-car-sales) are like nationwide. Indeed, not many miles west and southwest of here, in the Appalachians, many people are driving rusted old pickups.

Also, before we try and gauge the number of dealerships Caddy will need in the future, let's wait and see how the CT6 and XT5 sell (along with the upcoming compact XT3 CUV, which is likely to be a hit). Both, IMO, are substantially better products than the unimpressive XTS and SRX they they replaced...and probably deserve to sell more.
1. Lexus does just fine, and Lexus dealerships have the highest profitability per store in the industry, so I doubt owners of Lexus dealers agree they don't have enough dealers.

2. Cadillac is not doing this to benefit Cadillac. They get franchise fees from these dealers, and they DO sell cars however few. They are doing this for their franchisees so that they don't get stuck having to pay for the huge improvement package Cadillac is going to place on their franchise owners down the line.

Like I said, this is not uncommon in franchises. I know someone who owns a hotel, it was a Sheraton forever. Well, about 15 years ago Sheraton came to him and said look, were going to launch a huge companywide remodeling, new looks for hotels, minimum amenity levels. Your hotel doesn't meet those new requirements at all. If you aren't willing to Or capable of investing the millions of dollars into the hotel we're going to require we will offer an early termination of your franchise agreement and pay you a termination payout. He took it and the hotel since then has been a Clarion.
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