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Cadillac’s New York Move to Lead to ‘New Way of Thinking’

Executive Summary

GM product chief Mark Reuss says having employees live among people who set trends in the U.S. should help determine how to best market Cadillac. 

DETROIT – Cadillac has built well-designed, high-tech cars for years, but it has failed to connect with affluent buyers on the U.S. coasts, Mark Reuss, GM executive vice president-global product development, purchasing and supply chain, says, pointing to the brand’s pending move to New York as the potential remedy.

“We know we’re not selling as many cars, and we’re not on the radar of some of the people we’d like to be on,” he says on the sidelines of a Detroit Regional Chamber conference here. “The cars speak for themselves, but we have to get people to be interested in finding out what the car is.

“We find that if they drive them, they love them. But we need different approach in attracting these people to the brand.”

GM Tuesday announced the move, which will see about 50 employees relocated from Detroit to New York’s trendy SoHo district.

While the majority of functions with oversight and responsibility for both global and U.S. operations will be shifted to the new global headquarters, there will be no change to product-development teams in Michigan, the automaker says.

The move reportedly was championed by Johan de Nysschen, who joined Cadillac as its new president in August.

Reuss says having GM employees live among people who set trends in the U.S. should help the automaker determine how to best market the Cadillac brand.

“We’re all about taking excuses away and getting that clientele in the Cadillac brand,” he says. “People buy a brand and the brand promise, and that brand has to mean something.”

Cadillac sales have been on a downward trajectory, despite the recent launches of products such as the ATS sedan. Through August, sales dropped 4.6% vs. year-ago to 114,008, according to WardsAuto data.

Cadillac has failed to make a dent in the sales of German luxury leaders BMW, Mercedes and Audi, all of which sell well on the coasts. Reuss says GM can’t continue doing the “same thing over and over and expect different results,” adding the portfolio has been redone and now it’s time for Cadillac’s image to receive a refreshening.

“This is the brand piece of this. We have to have some new thinking about how we go to market with that brand and how we tell people about it,” he says. “This (move) is not about changing design and engineering.”

Reuss says the relocation is not an indictment on Michigan, noting the automaker employs 46,000 people in the state in 36 locations and has invested more than $5 billion locally since 2009.

“We’re talking about 50 people that are going take a look at why those people buy those (competitive) cars on the coasts and why aren’t they buying Cadillac,” he says. “We’re going to take those findings and put a new trajectory on the brand.”

Meanwhile, Reuss says GM’s new “Super Cruise” semi-autonomous driving feature likely will debut on the upcoming flagship luxury sedan, which is expected to go on sale late next year.

The yet-to-be-named flagship will help Cadillac compete with German luxury competitors such as BMW and Mercedes, both of which have top-end offerings.

“We haven’t had something like an S-Class or 7-Series, a flagship for Cadillac that talks about what the brand means,” he says. “We have no American car that competes with those brands in that segment.”

To ensure the high-tech features on the upcoming flagship sedan and future GM models can’t be compromised by hackers or other outside sources, Reuss says the automaker recently hired a cyber-security expert after consulting with entities outside the automotive industry.

“Over the last eight months, we went to the nuclear part of the Navy, a defense contractor, Virginia Tech and Boeing and asked how they hired their (cyber-security personnel),” he says. “As we put our semi-autonomous and autonomous vehicles, we have to look at this from a critical systems level and do it defect free. That’s a competitive advantage we’re trying to put in place for GM.”

bpope@wardsauto.com

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