No. 975
December 5, 2018
 

About The UjianNasional

Peter M. DeLorenzo has been immersed in all things automotive since childhood. Privileged to be an up-close-and-personal witness to the glory days of the U.S. auto industry, DeLorenzo combines that historical legacy with his own 22-year career in automotive marketing and advertising to bring unmatched industry perspectives to the Internet with Ujian-nasional.info, which was founded on June 1, 1999. DeLorenzo is known for his incendiary commentaries and laser-accurate analysis of the automobile business, as well as racing and the business of motorsports. Author. Commentator. Influencer. The Consigliere. Minister of the High-Octane Truth. DeLorenzo is considered to be one of the most influential voices commenting on the business today.

DeLorenzo's latest book is Witch Hunt (Octane Press  ). It is available on Amazon in both hardcover and Kindle formats, as well as on iBookstore. DeLorenzo is also the author of The United States of Toyota.

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Monday
Dec032018

ZERO TO OBLIVION IN JUST THREE YEARS.

By Peter M. DeLorenzo

Detroit. It was positioned as “The Pinnacle of design, technology and comfort.” It represented new breakthroughs by GM Engineering in the blending of mixed metals and advanced lightweighting applications. It was everything the company had learned from more than 100 years of car building wrapped up in one flagship sedan. It was to be The Future of the brand and it would signal the resurgence of a newer, hipper, next-generation Cadillac that would go toe-to-toe with the German and Japanese automotive luxury brands with no excuses.

And now? The Cadillac CT6 is being put out to pasture, deep-CT-sixed by the onslaught of a changing market, and consumer buying tastes marked by an insatiable desire for SUVs, crossovers and trucks.

I can’t think of a more perfect example of the swirling maelstrom that defines the automotive market right now than the imminent demise of the Cadillac CT6. This machine, after all, was going to lead Cadillac – and GM – out of the wilderness; it would be The Answer to all of the lingering questions about the future of GM’s luxury brand, while marking the dawn of a brand-new day. 

The CT6 was unveiled at the New York International Auto Show to much fanfare in April of 2015, and it made its retail debut in Cadillac showrooms a year later. And sometime in the next eighteen months it will be exited from Cadillac’s brand portfolio, to be replaced by a brace of new SUVs.

Zero to oblivion in just three years.

The time and effort to design, engineer, develop and create expensive marketing and advertising programs for the CT6 in order to bring it to market translates into hundreds of millions of dollars. It was the entire focus of GM’s luxury division for four years. And what was the result of all that effort?

To be charitable, it was mixed, at best. The front-end design of the CT6 has overtones of the Cadillac Ciel and Elmiraj concepts, but that’s pretty much where the resemblance ends. Purposely understated – almost excruciatingly so, I might add – the rest of the car is as bland as bland can be. And though the interior was decently rendered it wasn’t sensational, and the idea that this was Cadillac’s flagship never seemed to materialize. And the generally weak retail sales seemed to underscore all of this.

To give you an idea of how difficult this business is, the entire raison d’etre for the CT6 evaporated literally overnight. The market shift, make that stampede, to SUVs, crossovers and trucks was seismic, and the entire thought process and effort that went into the CT6 was made obsolete before the first year of its retail existence could be completed. It was fortunate for Cadillac that it at least had the Escalade and the XT5, but the fact that the CT6 ended up dead in the water is a cruel blow. 

But then again, I have to think GM and Cadillac divisional operatives got what they deserved. The prevailing mentality within GM is that Cadillac is a much better car – and car company – than people realize, and by aggressively going after the existing import luxury auto makers in terms of content, then pricing the CT6 right on the nose with its most formidable competitors would ultimately lead to market success. 

But GM’s internal perception of Cadillac, especially the CT6, never matched the reality “out there” in the market. It’s not that people have bad impressions of Cadillac, because the success of the Escalade proves that isn’t completely true, but when Cadillac specifically went after BMW and Mercedes-Benz with the CT6 and priced it right on the money with those luxury competitors, consumers weren’t buying it because the perception of the Cadillac brand just isn’t there. When loaded CT6 models first arrived at dealer lots with sticker prices in the $70,000 to $80,000 range, the response was underwhelming, to say the least. And the CT6 was crippled right out of the gate.

I recall what Toyota and Nissan did when launching the Lexus and Infiniti brands here in this country many years ago. They willfully took a loss of at least $15,000 per car in order to establish the new luxury brands in this market, something a U.S. automaker would never do. And it has paid off handsomely for them. In Cadillac’s case, it has one of the richest brand legacies in automotive history, but years of serial incompetence by GM management have suppressed the perceived value of the brand.

But that’s all irrelevant now, because even if Cadillac operatives had priced the CT6 for $10,000 less, it was too late. The tidal wave of SUVs and crossovers has put paid to the notion that a top-shelf Cadillac luxury sedan is actually needed, so the CT6 has become expendable. And GM has a brace of new Cadillac SUVs in the pipeline. (I am leaving the XT4 out of this discussion because it is a piss-poor effort from start to finish. In fact, the XT4 is a worrisome vehicle, leaving seasoned observers wondering if GM has lost more than a step when it comes to product development.)

And there’s a lesson in here for all other automakers too. While we watch as automobile companies divert billions of dollars into electrification and the promised endless riches of autonomous technology, while more “traditional” ICE vehicle programs are left stagnant by the wayside, there’s always something else coming. Example? If you’re an automaker going all-in for electrification right now and you don’t take into account the fact that hydrogen-fuel-cell-powered electric vehicles will supersede the BEVs planned now, then you might be out of business in a decade. Or less. 

The swirling maelstrom called the auto business never stops, and the pot never unboils. The CT6 was just another piece of collateral damage in a war that never ends.

And that’s the High-Octane Truth for this week.

 

Editor-in-Chief's Note: GM's Mark Reuss has pointed out to me that the Cadillac CT6 will live on in China, the world's largest car market. And that the XT4 is doing very well in its segment. -PMD

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