General Motors will invest $175 million in a Lansing, Michigan assembly plant to support production of two new Cadillac sedans, but in the process, Caddy is expected to dump drop the slow-selling ATS compact coupe and XTS full-size sedan.
Early in the new decade, those two models, as well as the midsize Cadillac CTS, will be replaced by just two all-new sedans, the automaker said. The cutback reflects both the overall U.S. market shift from passenger cars to utility vehicles and, more specifically, the poor sales performance of those three Caddy models.
It is not clear when the three current sedans will be dropped, but Cadillac isn’t expected to have the two replacement models ready to roll out of GM’s Lansing Grand River Assembly Plant until late in 2021, according to a spokesman. They will likely debut as 2022 models.
Cadillac has been facing a series of challenges in recent years that culminated in the ouster of its President Johan de Nysschen in mid-April. The South African-born executive had been hired in from luxury rival Infiniti and empowered to make bold moves to revitalize what had once been the country’s premier high-line brand. Among other things, de Nysschen ordered Cadillac to move its headquarters from Detroit to New York City, ostensibly to get closer to the luxury buyers who have largely shifted to imports.
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De Nysschen also pushed Cadillac to expand in China, today the world’s largest luxury car market. But while that drive has proved successful, the brand has failed to gain much momentum in the U.S.
A shortage of utility vehicles has been a key part of the problem. Until March, there were just two models in the line-up: the mid-size XT5 and the full-size Escalade. Just weeks before his ouster, de Nysschen unveiled a third offering, the XT4, at the New York International Auto Show, and at least two others are in the works.
While XT5 has been gaining momentum, Cadillac’s sedans have been struggling. U.S. sales of the ATS, originally envisioned as a BMW 3-Series-fighter, fell 39% last year. So far this year, the numbers are running at barely half the rate the compact model generated at its peak in 2014. CTS sales were off 35% last year and are running at barely a third the rate set when the latest version of the sedan was introduced for the 2014 model-year.
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The XTS, meanwhile, was down 27% last year. Sales have actually rebounded this year, in part due to hefty incentives and fleet sales. But the XTS was never seen as a true member of the Cadillac family. It was based on the same platform as the latest-generation Chevrolet Impala – which has also struggled in the market. It uses a front-wheel-drive layout, counter to the rear-drive focus for the rest of Caddy’s line-up.
GM’s flagship brand has not revealed what it plans for the two new sedans under development. Some sources suggest they could be targeted as “tweeners,” or models that slot between traditional market segmentations. Caddy took that approach when it launched the very first CTS sedan in 2002. The approach generated buzz both for the brand’s new and distinctive “Art & Science” design language and for the extra roominess and features offered in comparison to import models.
Cadillac isn’t walking away from passenger cars entirely. At the NY Auto Show it not only unveiled the XT4 crossover but a new, high-performance version of its flagship sedan, dubbed the CT6 V-Sport. Those two vehicles are part of a broader strategy, initially outlined by de Nysschen, to launch either an all-new vehicle or variant every six months through the end of 2024.
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“Cadillac is on the cusp of rolling out the most aggressive product portfolio expansion in the brand’s history,” Steve Carlisle, de Nysschen’s successor, said in a statement. “GM’s continued support of Cadillac positions us for tremendous growth in the coming years, and the continued investment in our North American facilities helps ensure we will remain on the forefront of manufacturing technology as our next generation of luxury vehicles are launched.”
Cadillac will regret the decision to move away from cars. Also, perhaps sales are down, at least in part, because the models are stale.
This article is stupid. The headline doesn’t match the article. You make a statement about caddy getting rid of 3 vehicles. They are adding 2.the xts was replaced by ct6. They are adding replacements for the cts and ats. The report from GM had nothing to do with crossovers. Get it together.
Wrong on your part, Joe. They are dumping three sedans and adding two. They are NOT one-for-one replacement, ie the Cruze for the old Cobalt at Chevy. And the company IS culling its passenger car line-up. No more wagon or coupe models coming. A series of concepts originally being worked up for production dropped. Meanwhile, it has everything to do with crossovers. The brand is shifting to CUVs because that’s where the market demand has moved. Sorry. YOU need to clearly “get it together.”
Paul E.