Detroit Bureau on Twitter

Cadillac Takes Aim at Lexus

Compact CUV could undercut rival’s crossover dominance.

by on Aug.30, 2012

Cadillac's new ATS may soon have a lot more company in the showroom - including a compact CUV.

Once the reigning U.S. luxury brand Cadillac is eager to reclaim lost ground and has put a target on the back of Lexus, which was itself the best-selling luxury brand until last year’s Japanese earthquake violently disrupted production.

The 2013 model-year will be a big one for the U.S. maker, as it rolls out both the new ATS compact luxury sedan and the more upscale XTS.  Cadillac is also working on plans to expand its line-up even further, officials now openly discussing plans to add a compact crossover – as first reported.

Your Auto News Star!

When asked about which brand was likely to windup to “donate” some market share as the deck is reshuffled in the luxury, segment, Cadillac’s marketing boss Don Butler didn’t hesitate – “Lexus,” he said, suggesting it certainly has a large pool of owners who could be persuaded to try something different.

Despite Cadillac’s clear ambitions, its rivals have steadily broadened and expanded the definition of luxury, leaving the General Motors brand a bit short of in some new and emerging product niches.

Even with the introduction of the 2013 Cadillac ATS in the highly competitive compact luxury segment and XTS in the full -size segment, Caddy will cover only 80% of the lux market — and rivals such as Audi, BMW and Mercedes-Benz are busy inventing new niches all the time.

But judging from the comments during a press breakfast this week – as well as discussions had with Cadillac management during the recent Pebble Beach Concours — the brand is seriously looking at getting into several critical segments.  That includes the premium-luxury market, where Caddy is likely to roll out not just one but several flagship models.

(For more on Caddy’s plans to turn the Ciel concept into production reality, Click Here.)

A Ciel-based 7-Series fighter might put a halo around the brand, Butler has said, but Cadillac insiders know there’s an even more important segment to fill as soon as possible.

“The compact luxury crossover segment has really taken off,” said Jim Vurpillart, Cadillac’s director of marketing. The Range Rover Evoque has had an enormous impact on luxury makers, he noted, and virtually every maker is now aiming at that niche.

The comments were echoed by Butler, who confirmed plans for a compact crossover, though he offered no details.

Cadillac’s confidence is buoyed by the recent success of its second-generation SRX.  The original version lagged ninth among large crossovers.  Since updating the CUV, however, it has jumped to second in the segment, behind only the Lexus RX.

Lexus is also considering its options for a smaller crossover, general manager Mark Templin confided in earlier this month.  But the Japanese maker is hesitant, he acknowledged, worrying that such a new offering could cannibalize sales of the bigger RX.

(Lexus looking at supercars, hybrids and compact CUVs. Click Here for that story.)

That hesitation could give Cadillac the momentum it needs as it fleshes out a showroom line-up that has largely been dependent upon a single model, the CTS, until recently.

Over the next year, Cadillac expects to bring out the new ELR, which is built around the plug-in hybrid powertrain from the Volt, as well as replacements for both the CTS sedan and Escalade, the latter to be built off General Motors’ new full-size truck platform.

There are signs the fast-expanding line-up is connecting with luxury consumers.  The ATS advertising campaign Cadillac aired during the London Olympics was an enormous success, Butler claimed.

Since the ATS hadn’t reached dealership yet, the timing wasn’t perfect. But the ads connected with a huge audience and raised consumer awareness of the new sedan. and others reported a sharp spike in research on the ATS and other Cadillac products following the Olympics campaign.

The question is whether that’s convinced some potential buyers to hold off until the new ATS reaches showrooms, Butler said.

Paul A. Eisenstein contributed to this report.

Tags: , , , , , , , , , , , , , , ,

3 Responses to “Cadillac Takes Aim at Lexus”

  1. ddlo2222 says:

    Sorry GM and Cadillac, Joseph S and Paul E may have written an article to let us know your efforts but it will mostly fail. Why? Cause your cars are considered ugly by most almost everyone who I know. Just my church congregation of 3,000 members, there is NOT ONE family that owns a Caddi. 25 years ago, it was another story. GM lost about 2 generations of faithful buyers.

    Don’t know who came up with the idea of vertical headlights. The new cars have the right curves, but its like a girl; blond hair, olive skinned, voluptuous body, but her eyes are dull and her eye brow shaped weird….. that’s the best way to describe the Cadillacs I’ve seen in the past 10 years. Just weird.

    However, the new Lexus, wow, I really dig the design, from he new RX to the new ES and the LS. The GS, that nose is too snouty, it sticks out. of course, beauty in the eye of the beholder. But I can boldly say, I have a pretty good sense of what’s beautiful, and it shows from my neighbors, friends who drive them, BMW, Mercedes, Lexus, Audi….but definitely not Cadillacs. Get rid of the UGLY vertical headlights PLEASE!!!

    • Paul A. Eisenstein says:

      Hi, DD,
      It’s all in the eyes of the beholder, I agree. I find that the Caddy look is definitely polarizing and some of the designs of the past decade didn’t connect, ie the STS and 1st-gen SRX. The new SRX has jumped from 9th to 2nd in its segment, albeit still well behind the Lexus RX.
      It’s intriguing which Lexus models you like. The only one that I truly appreciate the the GS, though the F-Sport I just finished driving for a week was not quite there in terms of adding a truly sporty touch. I think the 2013 LS is a big improvement but still short of the Europeans, personally, from an exterior styling standpoint. Caddy? The ATS nails it in terms of looks and a drive experience that is as close to BMW 3-er as anything I have driven. And I say that after spending time with the sedan for a second time in Monterey on some of the most challenging roads I have ever driven — a route I normally use for pushing vehicles to their limit. I don’t think any Lexus is close to that level of performance and handling, yet.
      Paul A. Eisenstein

  2. IS250 Man says:

    No matter how the Caddy looks, it has a reputation that will be hard to over come. Look at the average age of the Caddy buyers. Caddy has lost most of the class of buyers they need to succeed.
    They are in a different league than the BMW, Mercedes, Lexus, Audi…. Definitely NOT a league ahead of the competition. It takes more than raw horse power from a Chevy engine under the hood.