Carlisle on Cadillac Investment Plan Promises

The 1959 Cadillac Eldorado Biarritz had Pizzazz – from the grille, to the leather, to the big fins, it lived large. Moreover, it cost large – $7401.

Steve Carlisle, president of Cadillac, remarks at the New York International Auto Show: Good afternoon, everyone. It’s good to be with you. And I’m grateful for this opportunity to update you on Cadillac’s progress. Many of you have seen this chart before; it’s our 10-year plan to rebuild the Cadillac brand and recapture a leadership position in the global luxury landscape.

Today, following years of intense and strategic investment in the brand, in products and in technologies, we’re accelerating our momentum around the world… with the goal of growing our global volumes in a sustainable way.

No single chart can capture the amount of work and investment that have brought us to this point. Over the course of the next 30 minutes or so, I hope you’ll takeaway that the plan is working… and that Cadillac is earning its way into the hearts and minds of global luxury customers (in record numbers, by the way) … and that we have a plan to guide them into the future of mobility.

Change is the only constant in our world, and it’s accelerating. More than ever before, Cadillac lives in two distinct worlds – each with its own set of objectives, and each requiring equal urgency and daily attention. In the immediate term, we’re focused on aggressively grow our global sales volumes.

At the same moment, we’re seeing profound changes in technology, megatrends and consumer behaviors. In many ways, this inflection point is like the infancy of a new industry. Today, you’re seeing a Cadillac brand that’s very much determined to return to the role of catalyst. The brand that was once known as the “Standard of the World,” will become the “Pinnacle of Mobility.”

What does that mean specifically?

It means that Cadillac is not just GM’s global luxury brand, we’re also reclaiming the role of GM’s technology spearhead. In that role, we’re at the vanguard of GM’s commitment to a world of Zero Crashes, Zero Emissions and Zero Congestion. To get there, we’re accelerating the development and refinement of the next-generation technologies, which I’ll describe just bit later. (see Cadillac EV Teased in Detroit. First of BEV 3 Platform Variants) on Cadillac Innovations by Model Year

Click to Enlarge.

Let me be frank for a moment. If you look at the arc of Cadillac’s 116-year history, the brand has been at its best when it’s leading the way… in Design, Engineering… in Luxury. When we strayed off of that course, like we did in the mid-70’s through the 90’s, we lost “what makes Cadillac… Cadillac.” Our reputation and sales both suffered.

To accelerate the development of our current and future product plans, we’ve returned to our roots by relocating our global headquarters to Warren, Michigan. Cadillac’s “makers” and “sellers” are now in immediate proximity with one another.

Just as important as the efficiencies we’ve gained are the renewed focus, urgency and unity that are galvanizing and motivating the global team. The Cadillac team is united in purpose and incredibly focused on the mission. And we’re making progress. And 2018 was a year of important milestones for Cadillac. We posted the highest global sales mark in Cadillac’s 116-year history on 382,184 units… primarily on the strength of our performance in China.

On the product side, Cadillac XT4 arrived in September… and by December had captured leadership… in a segment with 11 established competitors. On the sedan side, we grew share with four of six models… and we achieved that with aging products in a luxury market that was contracting. This gives us a measure of confidence as we bring new products to market in the months ahead.

Once again, Cadillac continues to enjoy strong growth in China. Our sales surpassed 200,000 units for the first time in China in 2018, which equated to 17.2% year-over-year growth. In fact, 2018 was Cadillac’s sixth consecutive year of double-digit growth in China, and we remain one of the fastest-growing luxury brands in China, outpacing the average luxury market growth in 2018. Our rapid growth in China is due to new premium products, but also strong brand health; we’re seen as a desirable alternative to the ubiquitous Europeans.

Our buyers are not only hungry for an alternative to the establishment, they’re young (around 32); half are first-time buyers (which gives us an opportunity to become their luxury brand for life); and around 32% are female. We intend to build upon our momentum in China by continuing the torrent of fresh product… one new model every six months through 2021.

Our growth in China has been driven, in large part, by our Dealer-partners in region who are intensely enthusiastic about the Cadillac brand, the Cadillac portfolio and the opportunities that lie ahead.

Today, Cadillac has 302 operating dealer showrooms and aftersales service centers covering more than 100 major cities and regions in China… and there are plans to expand the network to 500 dealerships by 2025. Our Cadillac dealership footprint covers all tier cities, with a focus on developing markets.

The 140 Cadillac showrooms throughout the region have been upgraded to deliver what is described as “the New American Luxury experience,” with many more such upgrades to come. Suffice it to say, the commitment of Dealers – and their enthusiasm for what’s ahead – is nothing short of inspiring.

Through a lot of focused effort – and a decade-long commitment to delivering the exceptional for our customers – we continue to make progress on the customer experience front. This is both a science and an art. Project Pinnacle provides prescriptive retail standards that make it foolproof for our Dealers to create the environment and behaviors that luxury customers deserve and expect (and rewards Dealers for compliance). Our “Cadillac Moments” customer experience training provides the soft-skills, if you will, that complement those standards.

Consider that our 9-point year-over-year improvement – which is a significant gain – is what it took to solidify our hold on third place in J.D. Power’s CSI study, while we continue on our path to leadership.

While Porsche and Lexus rank first and second, respectively… we’re determined to stay ahead Audi, BMW and Mercedes-Benz by continually evolving Project Pinnacle in step with Cadillac Moments and introducing technologies that enhance the experience and further differentiate Cadillac in ways that drive sustainable sales growth. (Sales of BMW brand vehicles increased 3.7% in March 2019, with a total of 221,631 delivered to customers worldwide in the month. That result brings the sales total for the first quarter of the year to 519,307 or +0.4%. Cadillac has not reported Q1 global sales yet, but its been tracking at ~70,000 a quarter, – Autocrat.) onWayne Taylor led Konica Minolta Cadillac team wins second Rolex 24 with Cadillac. Jan 2019After an absence of more than a decade, Cadillac re-entered IMSA racing in 2017 with a brand-new Cadillac DPi-V.R Prototype race car program. Objectively speaking, Cadillac is dominating. We won the Manufacturer’s Championship in 2018… and so far this year, we’ve won both the Rolex 24 at Daytona and 12 Hours of  Sebring. Participating in motorsports raises the profile for the Cadillac brand; winning comes with an additional layer of swagger and credibility.

Most importantly, however, we have Cadillac engineers in the paddocks, garages and pits – and what they learn on the weekend, they apply to the development of Cadillacs that our customers drive every day. Racing is about making our products better. And that’s never been more valuable than right now, as we’re reinventing the Cadillac portfolio from top to bottom. The Cadillac portfolio reinvention is an elevation of the brand through product executions that are elevated in every way… Design, Performance, Technology, Quality, Craftsmanship and Connectivity.

The portfolio plan was designed at the outset to balance our portfolio with a mix of luxury crossovers, SUVs and sedans… And It includes new entries in new segments, driving growth for Cadillac and its dealers while providing luxury customers with more choices and more opportunities to access the Cadillac brand.

As we launch these new vehicles, we’re going to accelerate the pace of innovation… With a steady cadence of features and technologies that further differentiate Cadillac by bringing meaningful enhancements to people’s lives. on Cadillac CT5 Debuts at New York International Auto Show

The Germans are firmly entrenched in compact RWD vehicles.

A great example of this brand promise unfolded in New York this week as we unveiled an all-new sedan, the CT5 with Super Cruise. Super Cruise is the industry’s first true hands-free driving technology for limited access freeways.

There are similar systems out there, but none of them match Super Cruise’s unique combination of technologies, capabilities – including a unique approach to driver awareness – not to mention intuitive operation. The operational domain is massive – more than 130,000 miles of limited access freeway across the U.S. and Canada. And later this year will be expanding the available roads on the Super Cruise network. We will announce more details this Summer. Every customer-mile driven serves to validate the technology and validates our measured approach to its introduction and adoption.

In fact, Consumer Reports ranked Super Cruise as the industry’s leading Automated Driving System… yes, even out-ranking Tesla’s “Autopilot”… More recently, AutoBlog named Super Cruise its ‘Technology of the Year.’

It’s a powerful example of the kind of innovation that Cadillac imagination, perseverance and engineering can bring to bear. Super Cruise will be available on all Cadillac models, with the rollout beginning in 2020. (After 2020, Super Cruise will make its introduction in other General Motors brands.)

In fact, Cadillac CT5’s Super Cruise technology will be available in calendar year 2020 on select models. This expansion of Super Cruise to CT5 reinforces our commitment to bringing the most innovative technologies to our customers.

Perhaps the most important outcome of this continuing Cadillac product offensive is the creation of Cadillac’s first complete lineup of luxury SUVs… fueling our growth around the world. The mid-size XT5 will receive a significant refresh later this year, highlighted by interior enhancements, including our next-generation infotainment system.

The all-new three-row Cadillac XT6 arrives this summer to fill an important gap between Escalade and XT5. In just over two months from launch, XT4 took the number one spot in the segment, a position it still enjoys today.

We celebrated the completion of our SUV portfolio by shouting it from the rooftops… more specifically, by making it the focus of this year’s Academy Awards campaign. Let’s have a look at the SUV family spot from this year’s Oscars broadcast.

For two decades now, Cadillac Escalade has been the benchmark among luxury SUVs, with a foundation composed of bold design, powerful capability and luxurious accommodations. While some might say Escalade is a brand unto itself, the lift it provides to the Cadillac brand can’t be overstated.

Today, of course, the full-size luxury landscape is highly competitive. Even in the face of concerted efforts by our closest competition, Escalade continues to reign as the king of full-size luxury SUVs. We’re determined to keep Escalade on top by infusing it with next-level luxury, sophistication, strength and style… blending innovative technology and exceptional craftsmanship.

And then there is the “icon factor.” For 20 years, it’s been a cultural icon that is synonymous with style and sophistication… aspiration, but also achievement. It remains the vehicle of choice for the A-list from Hollywood and the music industry alike.

While we’re thrilled to have our first complete SUV family, we remain fully committed to sedans, like the CT5. Which raises the often-asked question: “why is Cadillac launching sedans in a market hungry for crossovers?”

Several reasons:

  • First, beautifully crafted driver’s cars remain part of our DNA.
  • Second, not everyone wants an SUV. In fact, sedan loyalists are often SUV rejecters.
  • Third, Luxury Sedans in China remain an important entry point to top brands, with many customers actively seeking out sedan as a desired body style. in fact, luxury Cars in China continue to grow in total volume and remain a critical part of global market scale for sedans worldwide

Here in the U.S. and elsewhere, Cadillac remains committed to the sedan market and to their passionate fans. In New York this week, we’re celebrating the arrival of the all-new Cadillac CT5, the definition of modern American luxury.  XT5 is car-lover’s dream, crafted upon the award-winning Alpha architecture. With a 2.-liter Turbo or available 3.-liter Twin-Turbo and segment-exclusive 10-speed transmission. AWD is available on every model.

We’ve also made significant enhancements to our flagship sedan, the Cadillac CT6, an extraordinarily important vehicle for us. It’s the embodiment of everything Cadillac stands for: brave design, mastery of technology, obsessive attention to detail, and the performance and craftsmanship represented by the all-new, Cadillac-exclusive 4.2-liter “Blackwing” Twin Turbo V8 engine.

Blackwing is a “statement” engine for Cadillac in a number of ways. It’s not just about its SAE-certified 550 horsepower and 627 foot-pounds of torque, it’s the exclusivity of the offering and the romantic story behind its creation. This engine is a big reason the CT6-V sold out in two hours.

It’s authentically Cadillac. In fact, “Blackwing” earns its name from the merlette, the black bird that adorns the original coat-of-arms of the explorer Antoine Cadillac — founder of Detroit, and a hero of Cadillac’s founder Henry M. Leland. Each unit is hand-built by a single engine builder and hand-signed – a nod to the fact that craftsmanship remains part of Cadillac’s DNA, today and into the future.

But of course, we’re not done yet.  Later this year we’ll take the wraps off of the Cadillac CT4 sedan… which shares the award-winning Alpha architecture with CT5. Our commitment to the sedan business is also a commitment to the world-class American Craftsmanship that resides in two of our plants in Michigan. We recently invested $175 million in our Lansing-Grand River Assembly facility to build our all-new CT4 and CT5 sedans.

Our flagship sedan the CT6 is in very capable hands at Detroit-Hamtramck… and we’re pleased that we were able to extend production into January. (Then the plant dies.) We’ve also invested $300 million at Spring Hill Assembly in Tennessee for production of the all-new Cadillac XT6, where it will be built alongside its stablemate, the XT5.

All of that product activity is going accelerate Cadillac’s growth around the world. Another vital area where we’re accelerating and changing things up is the marketing realm.

Phase one of our ten-year plan was the preparation phase. While the product development team was methodically reinventing the portfolio, Cadillac used that period to drive itself back into the luxury conversation and to begin to drive reappraisal of the brand. To that end, the previous campaign did its job. on Cadillac MarketingUnder the energetic leadership of Cadillac’s Global Chief Marketing Officer, Deborah Wahl, Cadillac’s marketing is driving a shift in how we go to market. From a purely aesthetic standpoint, you’ve probably already perceived that the entire look, feel and tone of our presence in the market is more youthful, colorful, vibrant and fun.

And in terms of go-to-market behavior, we’re making Cadillac a model of “Performance Marketing,” which we define, quite simply, as focused marketing investment that demands ROI – and the KPI is sales growth. Allow me to provide a couple of examples.

Our marketing mix targets the passions of our luxury targets – whether loyalists, move-ups or conquests, … and meets them on their terms with unforgettable 360-degree experiences that elevate the profile of the brand and drive sales.

Examples: Cadillac V-Series Performance Academy. We’ve returned to golf as “The Official Vehicle of the PGA of America.” Drive-to-dealer music program called “XT4-4TX.”

We’re also trying some new things, including a “digital first” CT5 vehicle launch that utilizes the exploding medium of ASMR videos to communicate the character and substance of the vehicle in a memorable and very viral way.

We continue to invest in the Oscars because it’s an iconic and global cultural platform that’s second only to the Super Bowl in global viewership… And delivers that reach at a much greater value.

Cadillac is also the presenting sponsor of this years’ Time 100, an annual list of the 100 most influential people in the world. The sponsorship is a continuation of the “Rise” campaign, which debuted at the Academy Awards. The campaign celebrates Cadillac’s legacy of perseverance and innovation.

According to recent data, our marketing efforts – including our new advertising tone and messaging – are bearing fruit. Brand Opinion is up almost 40% in two years (Q4 2016 vs Q4 2018).  In terms of Brand Opinion lift, the anthem spot “Rise Above,” was in the top 5% of luxury make ads tracked over the last 4 years (of 252 Ads).

Perhaps most encouraging of all, we’re seeing action on the part of consumers in response to our efforts; shopping on third-party shopping sites – Kelley Blue Book, for example – was up 64% m-over-m and 26% YOY in February.  That’s a quick summary of the immediate product and marketing activity that’s going to help drive the strong growth that defines our short-term mission.

Allow me to show you where we’re going next. Today, every manufacturer is keenly aware of the shifting Mega-Trends that are redefining personal transportation. Again, we’re at an inflection point as profound as the infancy of the industry itself. Now, as then, the company with the right combination of vision and technology will have the advantage.

As I said the top, Cadillac is at its best when it’s leading the way. In that spirit, Cadillac is proud to raise its hand as GM’s technology spearhead. And we’re proud to lead the corporation (and the industry) into a world of Zero Crashes, Zero Emissions and Zero Congestion.

I could talk for days about the next-generation technologies and ownership models that are in development by GM and Cadillac to make this future possible. In the interest of time, I’d like to focus on the broad framework of our Global EV strategy. on Cadillac as GM's Lead Electric BrandWe will leverage GM’s deep pedigree in electrification to provide the foundation of an entirely new kind of Cadillac. And as we shared in Detroit this past January, this effort is underpinned by GM’s next-generation battery electric vehicle architecture. This is the canvas upon which we will paint an exciting and profitable EV program. (Autocrat: BMW i is preparing to launch the next generation of solely electrically powered models. Three of the brand’s electric models are currently completing a key phase of their series development process at the BMW Group’s winter test centre in Arjeplog, Sweden. Together with the BMW iX3 due to go on sale next year, the BMW i4 and the BMW iNEXT, being brought to market in 2021, are also completing an intensive test program.)

We can build everything in the portfolio — CUVs, SUVs and cars — in front-wheel, rear-wheel or all-wheel drive on this one architecture. In addition, we are designing the battery packs to provide tremendous flexibility to meet customer range needs within the footprint of the vehicle. The architectural design will allow the battery packs to fit into the vehicle like ice cubes in an ice tray. You can put in as much water to make as many cubes as you need… the tray still takes up the same amount of space in the freezer.

This gives us astounding flexibility across the vehicle portfolio and allows us to deliver authentic brand-specific designs for multiple brands in multiple global regions, from this one architecture.

In execution, the future of Cadillac looks like this:

As GM’s technology leader, Cadillac will be the first brand to launch GM’s new and highly versatile battery electric vehicle architecture with an electric crossover aimed at – and accessible to – the heart of the global luxury market. Its development is already well underway.

In the meantime, we’re making progress against our short-term mission of launching and selling new Cadillacs in record numbers in a very competitive and dynamic marketplace.

About Ken Zino

Ken Zino is an auto industry veteran with global experience in print, broadcast and electronic media. He has auto testing, marketing, public relations and communications expertise garnered while working in Asia, Europe and the U.S.
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