Why is Cadillac Making Big Changes?
Just 15 years ago, Cadillac was languishing in luxury car purgatory, having spent all its capital after decades building milquetoast front-wheel drive cars for senior citizens. It decided to go back to basics, learn how to play the game defined by the Germans, and reestablish itself as “The Standard of the World.” Astonishingly, it worked. Today, the ATS, CTS, and all-new CT6 are world-class luxury cars, every bit deserving of their space at the table alongside Mercedes, BMW, Audi, Lexus, or Jaguar. The CT6 is especially interesting; currently the range-topping sedan, it falls somewhere in E-Class to S-Class, 5 Series to 7 Series divide. But that’s OK, because it was supposed to be joined by a range-topping CT8 sometime around 2020.
As late as yesterday, it was reported that the Mercedes S-Class-fighting CT8 was on track, and would be joined by the XT8 (a replacement for the Escalade), as well as the CT9 and XT9 by the end of the 2020s. The big 9 models would be a $250,000-plus sedan and SUV that would leapfrog over the Germans, take on the likes of Bentley and Rolls-Royce, and truly reestablish Cadillac as one of the world’s premiere luxury brands.
But alas, it isn’t to be. Autoline is reporting today that the CT8 has been cancelled, leaving the future top-shelf models in doubt, and stranding the unproven CT6 in an awkward position between segments. Since its release, it was supposed offer more than the midsize German models could, while the CT8 would be a bold S-Class competitor. Without that range-topper, Cadillac doesn’t have a car to compete in the cutthroat (and lucrative) full-size luxury sedan segment. And as with seemingly every promising car project that’s been killed in development lately, it looks like Cadillac’s focus on selling SUVs like the Escalade and the all-new XT5 – a replacement for its best-selling SRX – played a major role in the decision.
It goes without saying that if Cadillac wants to raise its profile it’s going to cost money. But it has $12 billion worth of GM’s money to do the job, and frankly, it hasn’t gone far enough to rest on its laurels yet. Big cars usually make big profits (Cadillac should know this, it can’t build Escalades fast enough), and besides, that kind of prestige trickles down through the lineup. Think about it: Most people aren’t buying BMW X4s because they’re great SUVs. They’re buying them for the BMW roundel.
The Mercedes S-Class is the best-selling car in America over $70k – and it starts at $95k. It’s the luxury equivalent of the Ford F-150, Toyota Camry, or the BMW M3; the cornerstone of the segment. Hell, Toyota built the entire Lexus brand around an S-Class fighter. By refusing to directly engage the Mercedes, 7 Series, A8, Lexus LS, and Jaguar XJ on the main floor, Cadillac isn’t acting like it’s arrived, it looks like it’s too scared to dance.
Just this week, Cadillac’s stablemate Buick announced that the muscular Avista concept won’t see production because it wouldn’t move the needle in China. Maybe so, but a full-size, rear-wheel drive luxury sedan would (despite the current recession), and it would sell in America too – and those are Cadillac/GM’s two biggest markets. Yes it would eat into resources that the company could use to develop and push more Escalades, XT5s, and their ilk into the the hands of willing suburbanites, but that’s small ball, the same maddeningly aimless game that kept the brand (and America as a whole) out of the luxury car conversation for decades. Small ball brought us the Cadillac Cimarron, the front-wheel drive DeVilles, and the Catera.
People want luxury models to aspire to, to lust after, to feel like they’ve arrived, or for reassurance that they’ve always belonged. Successful luxury cars don’t chase after trends – automakers like BMW and Mercedes have expanded their lineups downward to hook new buyers and eventually get them into their bread-and-butter models. For lack of a better term, Cadillac doesn’t have that luxury yet. And with the cancellation of the CT8, it raises the question of whether or not it ever will. We (along with millions of gearheads) have been rooting for a Cadillac return to the world-beating status it held decades ago. With this latest move, we’re left questioning whether or not it has what it takes.