Bigger is better at GM’s luxury division, as sales of newly lengthened de Villes and Fleetwoods have shot up 94%. : Cadillac Cruises Back
Add a few extra inches here, a little more sheet metal there, throw in a hint of fender skirts and tail fins--and what happens? Cadillac makes a comeback.
Last fall, Cadillac, desperate to recapture its traditional buyers who had fled to Lincoln and the imports after Cadillac had downsized its cars in the mid-1980s, introduced a new line of bigger, longer and, many would argue--gaudier--cars.
In an overt attempt to give the aging country club set the old-style Cadillac touches they yearned for, Cadillac brought back the land cruiser. Replete with fender skirts and extended tail lamps that resemble tail fins, the new Cadillac de Ville and Fleetwood models looked as though they had been driven straight out of the 1960s.
At first the media scoffed, yet the response from Cadillac’s old customers during the past few months to the newly lengthened de Ville and Fleetwood lines has been overwhelming.
Now, Cadillac sales are soaring, almost overnight reversing a long, steep dive that had threatened to permanently erode Cadillac’s presence in the luxury car market.
After building momentum throughout the fall, Cadillac sales have started to explode in recent weeks. In just the past month, the division’s sales have soared more than 50%, while its newly lengthened models are nearly 94% ahead of last year’s pace for the cars they replaced.
Even in early January, when General Motors total sales fell nearly 20%, Cadillac sales rose 24%, mostly on the strength of a 54% surge by its new big cars.
“What has happened is very simple,” observes Chris Cedergren, automotive analyst with J. D. Power & Associates, an Agoura Hills automotive market research firm. “What Cadillac has done is give the Cadillac buyer back his car.”
Cadillac buyers crave size and distinction, Cedergren and others argue, and were turned off when GM’s luxury division offered smaller cars that were nearly identical to those sold by Buick and Oldsmobile. While Cadillac did not turn the clock back completely by reverting to rear-wheel-drive--the new Cadillac de Ville and Fleetwood lines are still front-wheel-drive--they are now longer than anything sold by GM’s other divisions.
Indeed, Cadillac executives and dealers believe that most of the sales surge is coming from old Cadillac customers who had defected in recent years to Ford’s Lincoln-Continental luxury line, or to the German imports.
“We’re getting back our Cadillac buyers,” says John Grettenberger, Cadillac’s general manager. “They are so glad to see this Cadillac, they feel that it’s great to be able to recognize the car as a Cadillac whether it is day or night.”
“The thing that has really helped is that the car is distinctive, it’s not something the other divisions have, which is something the dealers had been complaining about,” adds Dana Martin, owner of Martin Cadillac in West Los Angeles. “The downsized Cadillacs were just generic look-alikes, but now traditional Cadillac buyers are coming back. We’ve been taking in more trade-ins of Lincolns and BMWs and Mercedes than we have in a long time, and that’s good to see.”
Young Buyers Unmoved
Despite the dramatic surge in recent weeks, however, Cadillac is still sticking to its earlier forecasts that call for relatively flat sales in 1989. Its de Ville and Fleetwood sales should be up, but Grettenberger’s not sure the rest of the Cadillac lineup can hold up in the face of what he expects to be an industrywide slump in luxury car sales this year.
Indeed, Cadillac’s biggest challenge is to turn around its two other main lines--the long-suffering Eldorado and Seville. Both have been plagued by the same kind of downsizing mistakes that devastated the de Ville and Fleetwood. In fact, while both are supposed to compete in the performance luxury market against the Germans and the Japanese, they’ve done almost nothing in recent years to improve Cadillac’s standing among the affluent young luxury buyers who now flock to BMW and Acura.
As a result, analysts say Cadillac is planning to introduce all-new Eldorado and Seville models in late 1991 for the 1992 model year. The redesigned cars, which will not have clones at any other GM division, will be both wider and longer than the current cars, with the Seville expected to be a foot longer than the 1989 model. Along with the larger size, a more sophisticated approach to the design and handling of the two cars will expand their appeal; Grettenberger says they will have a “more international look” than earlier Cadillacs.
“You’ll see us take some bolder moves with Eldorado and Seville,” Grettenberger said.
With such an aggressive revamping of its lineup under way, Cadillac is once again gaining favor with industry analysts.
“We’re not nearly as pessimistic about Cadillac as some other analysts are, because of their future product programs,” says William Pochiluk, an analyst with Autofacts, a Paoli, Pa.-based automotive market research firm.
That’s not to say, however, that Cadillac’s basic problem--its inability to attract baby boom generation luxury car buyers--has disappeared. Far from it. While it has lured its old buyers back, those people are slowly dying off. At the same time, the new Eldorado and Seville models are still nearly three years off, and the luxury market is getting more and more congested each year.
Cadillac will then introduce its new performance luxury cars into a market saturated not just by the Europeans but by the Japanese as well. Infinity from Nissan, Lexus from Toyota and Honda’s Acura are all gunning to take the market away from the Germans and the domestics.
Still, Grettenberger isn’t worried by the demographics. He argues that as baby boomers age, they will come home to Detroit-style luxury cars. They will tire of the smaller size and stiffer performance characteristics of the imports when they get old, Grettenberger insists, and will once again want the spaciousness and creature comforts offered by Cadillac and Lincoln.
“All we know is that when people age, their needs change,” Grettenberger says. “So we’re going to enjoy the bubble of aging baby boomers.”
But other observers believe that is just wishful thinking. Cadillac, they warn, better not base any future product plans on such dreams. Notes Cedergren: “Those people aren’t going to want fender skirts or tail fins.”
CADILLAC SALES SOAR
A bigger-is-better philosophy for the ’89 model year has fueled Cadillac’s explosive growth. Largely responsible for the improved sales are the front-wheel-drive De Ville and Fleetwood models. Los Angeles Times