GM to Change Designs of Its Smaller Cadillacs
General Motors, conceding that its new, downsized Cadillacs have flopped, said Wednesday it will redesign and lengthen some of its slowest-selling luxury models for the late 1980s.
GM also announced a reorganization of its troubled Cadillac division, which has seen its share of the luxury car market nose dive ever since its smaller, front-wheel-drive models first went on sale in 1984.
The company plans to introduce slightly longer versions of those cars, beginning in the 1988 model year, in order to recapture lost customers, according to William E. Hoglund, group executive of GM’s Buick-Oldsmobile-Cadillac car group, which oversees large car development.
Following up on last fall’s modest redesign of the 1987 Cadillac DeVille, a new Eldorado will be the first new Cadillac to emerge with substantial revisions in 1988, said Robert Dorn, newly-named general director of operations for Cadillac. It will be several inches longer than the current model, and will have new exterior sheet metal and styling to alter the appearance of its back end.
Other redesigned models, including a longer Seville, will be introduced in later years, Dorn added.
GM is moving first to overhaul the downsized Eldorado and Seville models because they have turned in the worst sales performances of any of Cadillac cars since they were introduced two years ago. During a record year for industrywide car sales, GM reported Wednesday that Eldorado sales fell 58.4% in 1986, while Seville sales were down 27.2%. Overall, total Cadillac sales remained almost flat, growing less than 2% and still below 1984 sales levels.
“We’re certainly not pleased with the market response to the Eldorado and the Seville,” Hoglund acknowledged.
At the same time, Hoglund said that, in an effort to bring a sharper focus and identity to Cadillac’s car lines, the Cadillac Division will be merged with the engineering and product development staffs that work on Cadillac cars for GM’s Buick-Oldsmobile-Cadillac car group. The merger should give Cadillac the ability to develop its own products with shorter lead times, he said.
In fact, the move will make Cadillac more of a full-line car company, instead of just a sales and distribution arm for the Buick-Oldsmobile-Cadillac group.
Control Lost
Cadillac, like GM’s four other U.S. car divisions, lost control over much of the engineering, development and production of its cars when GM’s 1984 reorganization turned those functions over to its two newly-created car groups.
That reorganization was supposed to create an environment in which the development work for new and distinctive car lines could flow through the GM bureaucracy more quickly.
But a little over two years later, virtually all of GM’s new luxury car lines seem to be failing. They seem to be too small for traditional luxury car buyers who no longer worry about fuel costs, they look too much alike and they are only slightly different in size and appearance from GM’s intermediate models, which cost thousands of dollars less.
As a result, Cadillac isn’t alone in its misery; sales of the new Buick and Oldsmobile luxury cars, which look almost exactly like Cadillac’s models, are also plunging. GM reported Wednesday that sales of the Buick Riviera, which is a twin of the Eldorado, fell 52.3% last year, while sales of Oldsmobile’s version of the same car, the Toronado, fell 47.8%.
Problems More Pressing
Since Cadillac is still GM’s main luxury car outlet, the problems with its image in the luxury car segment appear more pressing. And the image has only been enhanced slightly by the introduction of its low-volume, Italian designed Allante two seater.
As a result, Hoglund conceded that the “key element” leading to the reorganization of Cadillac was the need to make “Cadillac more distinctive.”
Some analysts on Wednesday praised Cadillac’s latest moves and said they may help the division get back on track.
“I think Cadillac has finally discovered what the problem is with the Eldorado,” said Chris Cedergren, a sales analyst with J. D. Power & Associates, an automotive market research firm.
Cedergren noted that the slight redesign of the DeVille has already transformed that model into one of the top five selling cars in California, which bodes well for the redesigned Eldorado. Cedergren, who has been sharply critical of Cadillac styling in the past, adds that the redesign of the Eldorado should help the car show sharply higher sales in 1988.
