June 23, 2014

Confession #48: Buick and Cadillac need each other right now

Buick Regal GS, Cadillac CTS (Photos: GM)
I absolutely feel for Cadillac right now. In my lifetime, there have been at least five big pushes to tell people "This is not your grandfather's Cadillac." And it's really only now the product has pretty much backed up that claim. That's why it sucks sales are spiraling.

It can't help that there's been a jumble of leaders over the past couple years at GM's most prestigious brand. And even after a sales bump in 2013, the momentum has been lost.

You could also blame the Germans. Thanks to Lexus' troubles at the beginning of the decade, the formerly dominant BMW and Mercedes raced to the top of the sales charts among luxury brands in the US. Even though Audi ranks far further down than the three aforementioned brands, dealers can't get enough of popular cars like the A3 and Q5. Audi definitely has the cool factor and momentum.

2015 Cadillac ATS Coupe (Photo: GM)
Cadillac should definitely have a cool factor. In talking about the ATS and CTS, there is no qualifier needed. They're not just good cars for Cadillac, they're good cars – period. It should be a win, but sales for the ATS in its second full year are tanking, and who knows if the 2015 ATS Coupe will significantly reverse that – or if the CTS won't have the same problem next year.

Then you have the blunder that keeps on injuring, the ELR plug-in. Ever since its ridiculous $75,000 price tag was announced, the ELR has suffered with a ridiculous ad and the very public fact no one is buying them. It hasn't been Cadillac's best year.

But, quietly, there's another GM brand that's been having several good years in a row. And they have a lot of the product Cadillac needs to compete head-on with the German rivals.

Buick Encore (Photo: GM)
Through May, Buick is up about 11% in US sales while Cadillac is off by 2%. Buick is no doubt helped by the fact it has two crossovers in its lineup, the tiny Encore and the great-big Enclave, which are its best-selling models this year. Cadillac only has one crossover, the mid-sized SRX that's also its best-seller. There's a reason every other brand in the luxury segment is quickly introducing crossovers of all sizes.

To beat them, Cadillac needs many more crossovers. The SRX is the right size to go against the eternally popular Audi Q5, BMW X3, etc., but it needs something with three rows to fight the also-popular Acura MDX and BMW X5 (although you could argue the Escalade competes fine with the more opulent Mercedes GL, Audi Q7 and Range Rover Sport). But at the low end, there's an ever widening hole where the BMW X1, Mercedes GLA and Audi Q3 go. And yes, the Buick Encore.

The problem is that Cadillac can't just go and add in these vehicles to augment its sedan lineup. GM has reportedly canned its idea to base a Cadillac three-row crossover on the same platform given to the Buick Enclave and GMC Acadia, for fear of robbing those popular vehicles of sales. What's to stop them from using a similar reason to not introduce any smaller, or front-wheel drive, vehicles.

Look at the Buick lineup, and it complements Cadillac's pretty well, eliminating much of the overlap that haunted the old GM. So why make a Cadillac smaller than an ATS if there's going to be a Buick Verano or Regal? Why give Buick something bigger than a LaCrosse if there's a Cadillac CTS and XTS? For everyone wondering why Buick wasn't killed off too in the bankruptcy, here's a reason other than "China."

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