smk4565

You are aware PDL is an ex GM-copywriter who was 'slighted' in the early '80s and hasn't 'seen a GM ad he likes' since, right? CT6 campaign so far has been very decent- has created nice aspiration & mood. FAR better than the mercedes 'disco chicken' ads. I agree that 'Escalade S' is a poor suggestion. Mercedes & BMW are hoping to get to Audi's margins too, but they don't have a vast volkswagon part warehouse in which to make it work yet. Audi A2 thru A6 : VW powertrains. For shame. Uh oh, found this on Forbes. com "The boost in volumes has also trickled down to Mercedes’ margins. As automotive companies typically have large fixed costs, they have a high degree of operating leverage. This means that a significant increase in volume sales/top line trickles down to the profits, as well. Driven by the high volume rise and product and price mix, Mercedes reported EBIT from ongoing business of €2.2 billion in Q3, up 38% year-over-year, and profit margins of 10.4%. The company has recuperated well after one-time costs associated with the launch of new/refreshed models had lowered operating margins to around 3% in the first quarter of 2013. High demand for the luxury automaker, and favorable pricing, should boost profitability in the last quarter, as well. In fact, Mercedes’ 10.2% operating margins for Q1-Q3 2015 are more than Audi’s 9.2% and BMW’s 9% reported operating margins during the same period." Mercedes had a 6.2% operating margin in 2013, and up to 8.3% in 4th quarter 2014. Slow steady climb up to the 10% of today. And exactly where they want to be. I guess their strategy worked. And a lot of people say the CLA has a lot of volume, the CLA barely outsells the S-class. Uh oh. You are trying to compare the entire Mercedes lineup against one brand of GM instead all the brands of GM, which (btw) has increased it's profits every year since coming out of bankruptcy. Just thought you should know before making yet another apples to oranges comparison. Johan has stated his goal was to get Cadillac to a 10% operating margin. He never said his goal is to get all of GM to a 10% margin, just Cadillac. Audi has been over 10% before, the Germans are running 9-10% margin now, (Porsche I am sure higher), why does Johan think it will take 10 years to get there? If you want to compare to GM, here is from their April 21, 2016 press release: "The company set first-quarter records for earnings and margin, with earnings before interest and tax (EBIT) adjusted of $2.7 billion and EBIT-adjusted margin of 7.1 percent. These compare to EBIT-adjusted of $2.1 billion and an EBIT-adjusted margin of 5.8 percent in the first quarter of 2015." ​

Yes, Cadillac has to market to the people that aren't buying the car now. This is what they are awful at. They aren't conquesting from the Japanese and Germans. If they don't conquest, they have to get huge numbers of first time luxury buyers, I don't think they are doing that either. They have to market to people that can afford the car though. If they make a car that 30 years think is cool, but they can't afford more than a $25,000 car, it doesn't do Cadillac any good. How about the Corvette? Median buyer age of 61, and they don't build it with VTEC for the younger buyers, they build it to suit the fan base, and the fan base buys it. They aren't trying to sell it to 30 year olds that can't afford it.

You are aware PDL is an ex GM-copywriter who was 'slighted' in the early '80s and hasn't 'seen a GM ad he likes' since, right? CT6 campaign so far has been very decent- has created nice aspiration & mood. FAR better than the mercedes 'disco chicken' ads. I agree that 'Escalade S' is a poor suggestion. Mercedes & BMW are hoping to get to Audi's margins too, but they don't have a vast volkswagon part warehouse in which to make it work yet. Audi A2 thru A6 : VW powertrains. For shame. Uh oh, found this on Forbes. com "The boost in volumes has also trickled down to Mercedes’ margins. As automotive companies typically have large fixed costs, they have a high degree of operating leverage. This means that a significant increase in volume sales/top line trickles down to the profits, as well. Driven by the high volume rise and product and price mix, Mercedes reported EBIT from ongoing business of €2.2 billion in Q3, up 38% year-over-year, and profit margins of 10.4%. The company has recuperated well after one-time costs associated with the launch of new/refreshed models had lowered operating margins to around 3% in the first quarter of 2013. High demand for the luxury automaker, and favorable pricing, should boost profitability in the last quarter, as well. In fact, Mercedes’ 10.2% operating margins for Q1-Q3 2015 are more than Audi’s 9.2% and BMW’s 9% reported operating margins during the same period." Mercedes had a 6.2% operating margin in 2013, and up to 8.3% in 4th quarter 2014. Slow steady climb up to the 10% of today. And exactly where they want to be. I guess their strategy worked. And a lot of people say the CLA has a lot of volume, the CLA barely outsells the S-class.

Delorenzo has some good points, the CT6 marketing campaign is craptastic. However the XT5 should not be called Escalade S or Escalade sport or anything like that. Horrible idea when you are going to have at least 3 crossovers, you can't call them all Escalade-something. Interesting that Johan wants to get to an 11% operating margin in 10 years. Audi is there now. People want to say sales don't matter, margin does, well Cadillac margins must be terrible if they are 10 years away from getting to Audi's level, especially when you can platform and engine stare with other GM vehicles.

Yes people know CTS now because they spent 15 years advertising it. So they throw that away and spend 10-15 years advertising CT4 and then they'll throw that away and start over again. GLK to GLC isn't that bad of a change, when there is already a similar looking C-class. And they changed SLK to SLC even though it has nothing to do with the C-class chassis. GLC sales up 84% in February and 97% in March. GLC is on fire!

Rumor is the Terrain will have the 1.5 turbo base and the 2.5 liter will be the optional engine, so I'd imagine Chevy will do the same. In a way that makes sense, because the Buick Envision at $35,000 has the 2.5 liter, I don't think a $23,000 Equinox would have the same engine, they'll make you pay more for it. I guess time will tell. I am sure CAFE will dictate a lot of what engines end up in these new crossovers.

So, were there thousands upon thousands of consumers scratching their heads & waving their hands in the air when "Grand Am" came out, as it was completely unknown then?I mean, there already was a 'Trans Am' AND a 'Grand LeMans' -- IMAGINE the WIDESPREAD CONFUSION!! What about 'CTS'- still think 'people don't know it'? - - - - - CT6 is just shipping to dealers now, new product names ALWAYS take some time to register at large. I would've thought that didn't need explaining... But they are killing the CTS name also. Any equity it may have built is about to be erased.This is a brand with zero focus. If sales stay low you know Johan will get pressured to fix it, and the quick fixes will come with Cadillac Cruze and Cadillac Equinox models at low prices. Their attack on the 3 and 5 series is a total failure, the ATS and CTS are selling worse than the CTS and STS did 10 years ago. While Lexus and the 3 Germans all have sales increases since then. 15 years they have been saying they will topple the Germans, still waiting....

It is always better to look at a full year to really see how a car is selling. We all look at the monthly sales report to see what is up or what is down, what is hot and what is not. But it isn't all doom and gloom with one bad month. S-class was up 9.7% in February. If it is down again in April maybe they should worry a little, but the S-class outsells its next 3 or 4 competitors combined. But if crossovers are up when sedans are down, as long as overall brand volume rises, they are fine. BMW goes through the same thing with the 5-series and X5. If 5-series is down 1,000 units and X5 up 1,000 units, what do they care, they got their money.

An excellent idea to move to Delta2 and make it smaller. The current Equinox is about a foot longer than an Escape or CRV. This will get it right sized, and it opens the door for Chevy to add a crossover in between the Equinox and Traverse. Being smaller, this might be close to the Malibu's weight, the 1.5L turbo could be used, that should top 32 mpg easily.

March 2016 GLA up 15% GLK/GLC up 97% GLE up 17% Hmm, good thing they saw the crossover boom coming and were prepared.

Of course, because MB follows revenue above all else! March 2016 ~ cla-class : DOWN 28% c-class : DOWN 13% e-class : DOWN 19% s-class : DOWN 36% VANS :: UP 29% Expect to see increasing emphasis / dealer stock on from the etherial "van division" of Daimler in the coming year as the rest of the brand is entering a sales 'slide'. Do not forget the rebadged Nissan Truck that will show up along side the vans for sales sA one month snap shot, E-class is on a model change over, C-class adding 2 body styles this year. They'll stabilize, but sedan sales are dropping, crossovers are rising. The overall luxury sedan market was down like 15% last year.

Cadillac and Mercedes or BMw are not the same. The 3-series has been around 35 years, the Mercedes SL for 60 years the S-class for 50 or so years. They have consistancy of that naming convention and those products. Cadillac had a history of word names, people don't know CT6 or XT5, they are easily forgettable. It is like when Pontiac introduced the G6, no one knew what a G6 was but they knew Grand Am. I have long said I think Cadillac is better with word names, just like I was glad to see Lincoln bring back Continental, it is just too bad it is wrong wheel drive. Cadillac has done a good job making stand alone showrooms in recent years, I think their dealerships are fine. Maybe they aren't as large or luxurious as Lexus's but I don't think it matters. We all know Cadillac needs crossovers badly and they have some on the way. I think they need a convertible too because convertibles are aspirational products, and a luxury brand is aspirational. This can relate to when 1/3 of CTS sales were coupes. Take away the coupe and a buyer wanting a 2 door car just goes elsewhere.

C-class sales were up 15% last year, and they only had the sedan body style, they are adding coupe and convertible, and a hybrid this year. So the CLA isn't stealing sales from it, and the CLA isn't hurting the Mercedes brand image either. The CLA isn't anywhere near as good as a C-class, but when you compare a CLA to an A3, or an Acura ILX or 1-series it doesn't look so bad. If nothing else the CLA helps their CAFE number, they need something to do it.

The Cruze is dog slow. If the Cruze was as good as a CLA, but $10-15,000 less, then it should be whipping the Focus, Civic, Corolla in sales, everyone would want one. Cruze is no better than the other cars in that segment. I also think the back seat is not the reason the ATS doesn't sell. I think the badge on the grille is the #1 reason, #2 is the exterior look is a bit bland, and #3 is the interior overall isn't that great. Audi and Lexus are better, Mercedes way better, and the 3-series has a class average interior, but it has such a loyal following it gets away with it.

The "small segment" is a couple hundred buyers. Yes, it 'can' be ignored. And if having a convertible doesn't sell any more sedans/coupes, and almost no convertibles themselves sell, how does it "help" in any measurable way? General Motors has rebuked the 'Cruze-based future Cadillac', so Cadillac has decided they DON'T need a competitor. The convertible is something that looks good in a commercial or on a dealer lot. So it can draw people in, help with brand image. From that stand point it could help overall sales. I don't think having an E-class convertible helps sell E-class sedans directly. But if a luxury buyer wants a convertible with a back seat, they basically have Mercedes, the A5 and 4-series as their choices. Not sure if Lexus or Infiniti still make a convertible. If you want a 2 seater, there is Porsche, Jaguar, Z4, etc a few more options. But Cadillac can't just ignore convertibles and not even attempt to bring in those buyers. You have to at least offer a product to get people to consider the brand. Chevy has 2 convertibles, even Buick has one. Cadillac should have at least 1, probably 2.

DeLorenzo nailed it. The Escalade is their one grand slam product, and it is big, heavy, V8, has a word name, etc. It is the opposite their other products. The Escalade is riding high now in times of cheap gas, there is risk there if gas gets expensive or the economy tanks. But they could easily put a V6 hybrid system or something in an Escalade to get the fuel economy up if they had to. The rest of the line needs work, they need word names, they need marketing. The alphabet soup names are forgotten among consumers, the ads aren't drawing people in or moving the needle.

The Cruze is a luxury car? It isn't even comparable to an Acura ILX, let alone a CLA. I am not a CLA fan, but the CLA45 does do 0-60 in 4.5 seconds, that is as fast as a CTS V-sport, so it isn't a slouch car. Even the base car does 0-60 in 6.9 seconds and the interior is what you would expect for a low $30k car. I don't really see what the Audi A3 does any better, I think the Audi interior is more sparse than the CLA.

Sergio is over compensated by about $70 million. I think a lot of CEO's in a lot of companies are overpaid. If you are like a Steve Jobs who is CEO and inventor, then you are worth every dime, because he was developing the product that was making the money. But for the caretaker of the throne type CEO's that make $25 million then complain that they can't pay workers more than $10 an hour because profits will go down, I think they are full of crap. That is for all industries, not just auto.

I am not saying that convertibles will help sell more sedans, but there are a number of buyers out there that want a convertible. So if you want that body style, Cadillac isn't even on the radar. Yes it is a small segment, but you can't just ignore it totally. It would help the image of the brand also to have a convertible. Best news of the day is that Cadillac is planning a car based on the Cruze, that will be priced in the mid $20s with a 1.5 liter turbo and a 2.0 turbo range topper to compete with the CLA. Everyone wants to trash the CLA, yet Cadillac seems like they need to build a competitor for it.

Mercedes and Lexus have better dealerships than Cadillac, but that isn't why Mercedes and Lexus beat Cadillac. Cadillac's marketing is bad, the product line incomplete, and the ATS uncompetitive in the high volume entry-lex segment. CTS sells comparable to a GS or A6, you can live with the CTS's sales volume, although more would help. But when your brand has 2 coupes (if the ELR is still around), 1 crossover and 0 convertibles, you have a product problem, and there is a management problem for letting the brand go this long without essential product.

If the dealership was so important then Cadillac or Lincoln or Jaguar could just build luxury dealerships and get sales. It doesn't work like that. Copying Lexus's dealership experience would be a lot cheaper than copying their car line. Rahal owns a Jaguar/Land Rover dealership about 3 miles away from their Mercedes dealership, and the Jaguar dealership is newer and nicer, I would assume equal service since it is the same owner. But they sell a lot more Mercedes than JLR.

Cadillac doesn't have the competing product. They don't make a small crossover which is the #1 growth segment in the auto industry, I think at 17% growth last year. Cadillac doesn't make a convertible, if you want a convertible you can't even consider the brand, lost sales on a high margin vehicle. The product line has holes and has had holes for 10-15 years. ATS is also getting clobbered, Lexus IS and the German 3 outsell it, Acura TLX and Lincoln MKZ outsell it but they are bigger cars, not a direct competitor.

Honda and Toyota have stand alone dealers too. (Now that Scion is dead . Most car brands have their own building. It is industry common place. Which is why Cadillac should have stand alone dealers, and most Cadillac dealers are stand alone. I have always said dealership amenities and customer service are important for the service department because people have a lot of alternatives to take their vehicle to for service. I don't think the dealership plays a big role in the sales decision. If ABC Lexus has the nicest building in the world and XYZ Lexus 40 minutes away is mediocre but has that RX350 in the color you want for $2,000 less than ABC dealership has it, guess what, the customer is driving for the better deal, and the building didn't matter. An awful dealership can hurt sales, but I think for the most part dealerships are all about the same and aren't winning sales.

What makes the Buick so premium though? It has an engine you'd find in a CR-V or Rav4. The RDX has a 279 hp V6, the Lexus NX and Lincoln MKC have turbo 4's standard. For the premium price over the Honda/Toyota/Ford you get a noticeable engine upgrade. I wouldn't say the Envision has a better interior than any of those 3 vehicles either, and the Buick is made in China, vs American made Lincoln and Acura, and Japanese for Lexus, so they don't win the country of origin image award either. I think the Buick Envision is needed, crossovers are hot, but they way over priced it. The Envision is priced $14,000 above the Verano, and is the same size vehicle with basically the same engines, 2.4 liter vs 2.5 liter the only difference.

And to clarify I do think Cadillac should have stand alone dealers, because Lexus, Infiniti, Acura, BMW, Mercedes, Audi for the most part do, and Jaguar/Land Rover often share a dealership. All the other luxury brands do a stand alone dealer, except maybe Lincoln that combines with Ford a lot, and look where they are. It is just the cost of doing business in the luxury market, they all have stand alone dealers. That being said, I don't think the dealership is winning buyers. There is an Acura dealer next to the Mercedes dealership I get my car serviced at. They could pave the Acura parking lot in gold in give away free lunches, that isn't going to make me want to buy an Acura, because I don't like Acuras. The stand alone dealer is just an expectation, like if you go to a restaurant you expect the place to be clean, silverware to be clean, the waiter to bring ice water, take the order in a promo manner, etc. Those are just basic expectations. But if you like Italian food and don't like seafood you aren't going to Red Lobster because the wall paper is nicer than what Olive Garden has. The product matters far more than the building. Cadillac still has a product problem, but their number 1 problem is marketing.