Despite solid reviews, sales of the Cadillac CT6 haven't lived up to expectations.
Cadillac will pair back its existing sedan line-up to no more than two models, while eliminating coupes and shifting focus to utility vehicles, according to the brand’s global chief Johann de Nysschen.
That appears to confirm a report last year by TheDetroitBureau.com that said the brand was getting major pushback from parent General Motors in light of slow sales growth and the overall shift in the luxury market from passenger cars to SUVs and crossovers.
“We have to rebalance our sedan portfolio,” de Nysschen told the Reuters news service in an interview. The Cadillac chief previously refuted a report by this publication outlining Cadillac’s shift in product focus.
When the South African-born de Nysschen first came aboard three years ago, he outlined a dramatic product growth strategy that ranged from the compact ATS all the way up to a full-size luxury flagship tentatively to be called either the CT8 or CT9. And other passenger car models, possibly in coupe and convertible form, were also under consideration.
Cadillac did score a hit with the relaunched Escalade
But demand hasn’t supported those grand plans. As a result, insiders confirm that among six passenger car models GM is considering cutting, two are from the Cadillac line-up: the XTS and the current flagship, the CT6. The latter model is expected to survive, but the XTS will go away, de Nysschen told Reuters.
In fact, so will both the mid-range CTS and entry-lux ATS, the executive explaining that the three will effectively be replaced by a single new sedan, which will be renamed the CT5. Cadillac currently plans to also add an even smaller entry-level model, a sedan to target the Audi A3, according to de Nysschen, who had once served as head of the Audi brand in the U.S.
Cadillac’s heavy emphasis on sedans has been a liability at a time when the overall car market has been moving to light trucks, and SUVs and CUVs are rapidly coming to dominate in the luxury segment, in particular.
(Click Here to see which 6 sedan models GM may soon drop.)
Cadillac has done well in China, but the U.S. market is lagging due to a shortage of utes.
As a result of its imbalance, Caddy sales tumbled 1.6% for the first half of 2017 in the U.S. market. On the sedan side, the slump was an even more precipitous 16.3 percent.
If there has been any salvation for the brand, it’s been the better reception given its two ute offerings: the classic body-on-frame giant, the Escalade, as well as the car-based XT5 crossover.
Also helping Cadillac has been its expanding presence abroad. Global sales were up 27%, largely due to the addition of production capacity in the booming Chinese market.
In line with prior reports by TheDetroitBureau.com, Cadillac will add a number of new SUVs, including a compact to be dubbed the XT4, and an as yet-unnamed three-row model due in 2019. According to de Nysschen, that ute will target the likes of the Volvo XC90.
A year ago, Cadillac pulled another sedan from production, the plug-in hybrid ELR, due to marginal sales. But, like Volvo and other luxury brands, the U.S. maker is intent on pushing back into electrification. It recently added a plug-in hybrid version of the CT6, though primarily for the Chinese market.
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Beyond that, de Nysschen now says Caddy will take a path “not dissimilar to what Volvo has announced.” The Swedish-based, Chinese-owned automaker plans to make a shift to a completely electrified line-in with all new models introduced in 2019 and beyond. While that will primarily focus on conventional hybrids, Volvo will also add more plug-ins, like its current T8 Twin Engine powertrain, as well as pure battery-electric vehicles.
De Nysschen did not disclose what specific products will come to the Cadillac line-up beyond the CT6 plug-in using electrified powertrains.
Cadillac initially denied it would launch a major shake-up in its product plans along the lines of what de Nysschen now says is coming for the brand. The new strategy appears to reflect both the continuing changes in the automotive market and, according to sources, pressure from top GM management.
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