Product? Or brand?
It’s the eternal debate in the auto industry. Which is more important, ultimately? A great car, or a great nameplate?
At Fortune, Alex Taylor III zeroes in on the eternal question in an analysis of the relatively striking changes that Cadillac is currently going through. General Motors’ luxury division has a new leader, Johan De Nysschen; has moved its marketing and sales teams to sexy New York from dowdy Detroit; and is throwing down the gauntlet for what it considers to be its natural rivals, BMW and Mercedes.
The general alarm about all that Taylor recounts is: Oh no! Cadillac is going to juice the brand at the expense of the cars!
The marketing people are taking over!!
The engineers are out!!!
This can’t end well!!!!
Longtime Cadillac loyalists are running out of patience. They fear that the 112-year-old car line has been taken over by outsiders who don’t respect the Cadillac name, its history, and what it stands for. Their worry revives a running argument in automotive circles, to wit: Should car companies be selling the sizzle or the steak?
Well, maybe. The thing is that Cadillac, while ostensible a luxury brand, is actually in terms of its product more of an exotic brand. The sedans and SUVs are a bit extreme, a bit over-the-top. And they have been for a decade.
Or maybe a bit more than over-the-top. As proof, I give you…the Cadillac Escalade:
In any case, as far as the steak goes — Caddy has some pretty awesome steak. And it’s profitable steak. In fact, we will soon learn just how profitable, as GM will break out Caddy financials from the rest of the enterprise.
As for the sizzle…well, it’s the wrong kind of sizzle. It’s the sizzle of excessive, flamboyant luxury, not the seductive aroma that wafts from BMW, Mercedes, Audi.
That German new car smell, if you will.
[W]hat the car buffs forget is that Cadillac has been investing heavily in new products for more than a decade with only mixed results. In late 2000, GM executives held an informal meeting to discuss Cadillac’s future and agreed on a strategy to recast its product line with more of a European attitude. The 2003 CTS was the first Cadillac to employ the new philosophy. From there came the STS sedan and first-generation SRX crossover. GM spent $US4.3 billion on the effort and Cadillac is still trying to catch up.
So maybe it’s time to spend a few billion reframing the brand.
As a true luxury brand.
It’s worth a shot.
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