General Motors Company (GM): Cadillac’s Sales Hurt by Increased Competition

According to the report by Phil LeBeau of CNBC, General Motors Company (NYSE:GM)’s Cadillac is the only brand from the auto luxury segment that has had lower sales in this year. LeBeau stated that “when you look at the luxury segment this year for the entire auto-industry it’s really one of the best years, except for when you are looking at Cadillac. […] Cadillac is the only mass market luxury brand that has had lower sales this year. Everybody else is up.” Cadillac may still be suffering from the problems they had with the recalls, but they are also suffering from increasing competition and dealers’ dissatisfaction.

Despite such a good year for mass market luxury auto brands, General Motors Company (NYSE:GM)’s Cadillac division is facing severe competition, especially from German auto makers such as Audi AG, Mercedes,  Lexus. In particular, Cadillac ATS and the ELR models performed disappointingly. The ATS saw its YTD sales down by 21.8%, while the whole range of Cadillac declined by 1.2%. Comparable Audi’ saw 14.3% higher sales, while BMW’s sales appreciated by 12.8% and Mercedes’ sales were also up 8.4%. While the video did not provide specific numbers, he remarked that “nobody is buying” the extended range electric vehicle, the Cadillac ELR.

Cadillac’s problems seem to also concern dealers.

“[…] Dealers are not happy with Cadillac’s brand direction, not happy with ELR that nobody is buying. They are not happy with the marketing, they are not happy frankly with the leadership that they are seeing within the Cadillac division,” LeBeau added.

He went on to suggest that it is expected to see changes from Cadillac, once the problems they had with the recalls are solved, and that it is going to be the next focus for General Motors Company (NYSE:GM)’s CEO, Mary Barra and her leadership team.

Disclosure: none