GM's Cadillac isn't just for geezers anymore

Once best-known for its appeal to old people, the brand now leads the US auto industry's continuing revival.

By TheStreet Staff Jun 4, 2013 12:48PM

thestreet logo A young man buying a new car copyright i love images, Cultura, Getty ImagesBy Ted Reed

 

Who would have ever thought that Cadillac would lead the U.S. auto industry's sales revival?

 

Not long ago, Cadillacs were "geezer cars," said independent auto analyst John Wolkonowicz. "You saw them at retirement homes, churches and old people's restaurants." In 2011, the average age of a Cadillac buyer was 57, compared to an industry average car buyer of 51, according to Polk. Only the Lincoln buyer, averaging 60 years of age, was older, Polk said.

 

On Tuesday, GM (GM) said Cadillac sales rose 38% for the first five months of 2013, the brand's largest sales increase since 1976, making the 110-year-old brand the fastest growing major automotive brand in the U.S.

 

"Think about that," Kurt McNeil, vice president of sales operations, said Monday on GM's sales conference call. "We're talking about the days of disco, when Cadillac was strictly a U.S. brand back then, not one that's directly challenging the German luxury brands and gearing up to triple its sales in China over the next couple of years."

 

Overall light-vehicle sales rose 8% in May, continuing a long recovery, with total 2013 sales expected to reach about 15.5 million, the highest since 16.1 million in 2007. The sales revival has been led by pickup trucks, light-utility vehicles and small cars, although Cadillac is showing the largest percentage gains off a relatively low base.

 

"Older people are still the core of Cadillac buyers," said Edmunds.com analyst Jessica Caldwell. "You can't change the buyer profile overnight. But if you continue to bring out cars that appeal to a wider variety of people, it can happen."

 

Cadillac's revival is being led by the ATS compact luxury sedan, the 2013 North American car of the year as selected by a panel of automotive journalists. ATS sold 3,249 units in May and 15,724 units in the first five months of 2013. GM said 70% of ATS sales are by first-time Cadillac buyers.

 

The SRX mid-size luxury crossover is the brand leader, selling 3,744 units in May and 20,078 units in the first five months. The XTS luxury sedan, introduced last summer, had its best retail sales in May and sold 2,429 units. And the Escalade full-size SUV sold 1,928 units, its best May since 2008.

 

Of course, an overall 40% sales gain in May took Cadillac to 13,808 units, just 5% of GM sales. Nevertheless, "from an image standpoint, Cadillac is important," Caldwell said. "Cadillac is showing traction and is able to grow sales. If sales were not growing, after GM refreshed the brand, that would be a big concern."

 

Wolkonowicz said GM has been working for more than a decade to revive Cadillac. Early in the century, Escalade became the vehicle of choice for young rap singers, which Wolkonowicz said was the start of the change in Cadillac's image.

 

"They've been very consistent about it," he said. "They haven't wavered. They have spent money where they need to spend it, created a distinctive signature for the brand and stuck to it. Like Mercedes and BMW, Cadillac is very easily recognized."

 

Wolkonowicz contrasted Cadillac's evolution with that of Lincoln, particularly because Cadillac uses a unique platform with rear-wheel drive, while Lincoln uses a Ford (F) platform. "Lincoln is trying to recreate the brand with gussied-up Fords," he said.

 

The next frontier for Cadillac, he added, is to overcome baby boomer preferences. "Baby boomers are pigheaded," said Wolkonowicz, while conceding that he himself is a baby boomer. "In mainstream cars they buy Japanese and in luxury cars they buy German.

 

"If more people in that premium segment would give ATS a chance, it would sell even better," he said. "Fortunately, the generational mix does change. Young people have a much more open mind about these things."

 

 

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11Comments
Jun 4, 2013 3:13PM
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I have a CTS and its a fairly nice comfy sporty powerful car handles rather well, great stereo, 3.6 very peppy and great mileage around 23 + or - . Might by another caddy, yep there that good.
Jun 4, 2013 4:08PM
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Escalade - Preferred by pimps and gang members everywhere. Capable of comfortably seating the driver and five fully armed passengers.

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cadilliacs are improving but no where near the prices, i looked at an impala the other day and a caddy, believe it or not the chevy actually had a nicer appointed interior at about half the price. if you are marketing a luxury brand it should look it inside and out, caddy only looks luxury on the window sticker. if i were running gm i'd be making some major changes in management. spend a little more on luxury appointments and a little less cramming tv ads down our throat and caddy will come back.
Jun 4, 2013 3:34PM
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That's true. The middle aged blacks love them too.
Jun 4, 2013 10:21PM
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The article or much of it is about investing...Caddy is helping GM..

Whether you are an investor or not is up to you..

Non-investors need not reply, because you will only look more ignorant.

Jun 4, 2013 2:34PM
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It would be interesting to see drawings of cars from manufactures that are gone.    Packard, Tucker  Pierce Arrow Stutz and others

 

Jun 4, 2013 2:37PM
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If a GM car is even given to me for free,I won't even drive it,I'll sell it in a heartbeat,nothing but garbage buying a GM car is like been faithful to an unfaithful wife.And I transported them for over 25 years,CRAP!!!!!!!!
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