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Roadblocks Ahead Of General Motors Company (GM) In Rebuilding The ‘Cadillac’ Brand

General Motors Company (NYSE:GM)’s Cadillac was a very successful brand in United States. But over the years it has lost its hold in the market. General Motors Company (NYSE:GM)’s CEO Mary Barra has decided that she would attempt to rebuild the ‘Cadillac’ brand within US, but this had to overcome two roadblocks which the auto maker is facing now. A ‘Business Standard’ article discuss about General Motors Company (NYSE:GM)’s Cadillac brand and the problems the company had to face in coming days to rebuild this brand.

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The two major roadblocks that General Motors Company (NYSE:GM) had to face in rebuilding ‘Cadillac’ brand are, push the American buyers to buy the leftover ATS and CTS Sedans from 2014 and make more Escalade SUV to satisfy the demand. Cadillac ATS and CTS sedans were originally launched to compete against the likes of foreign luxury car makers BMW and Mercedes, but both these sedans did not get much attention from the buyers. So the company had to sell the leftovers from 2014 by offering huge discounts to buyers and dealers.

Some reports suggest that Brad Brotherton, a dealer is offering $12000 and $17500 discounts on ATS and CTS Sedans respectively in Washington.

“Cadillac made a commitment to relieve dealer inventories by incentivizing. Dealers had been asking for that for a long time,” Brotherton was quoted as saying.

Did General Motors Company (NYSE:GM) made a mistake by directly competing against the likes of luxury car makers like BMW and Mercedes, which were more preferred in luxury cars sector over Cadillac by American buyers? Some people feel that the Cadillac ATS and CTS were overpriced and General Motors Company (NYSE:GM) has over produced them as well, which left them back in a situation to clear the inventories.

General Motors Company (NYSE:GM) was facing this issue with Cadillac for over a year and they have even shut down their manufacturing facility at Michigan for 6 weeks. Post this, the company decided to manufacture ATS and CTS Sedans in this facility in just one shift.

On the contrary, General Motors Company (NYSE:GM)’s Cadillac Escalade SUV is pouring in a lot of cash to the company. The sales of this SUV went up by 149% Year-Over-Year. This increasing SUV has compensated for sales drop of 8% and 24% for ATS and CTS Sedans respectively. Overall Cadillac sales went up by 2% Year-Over-Year during January. General Motors Company (NYSE:GM) is also not keeping up with the demand for Escalade SUV.

Meanwhile reports suggest that General Motors Company (NYSE:GM) has cleared more than 90% of the ATS and CTS Sedan leftovers from 2014.

Will General Motors Company (NYSE:GM) do something to revive the Cadillac Sedan sales and meet the overwhelming demand for Escalade SUV?

Disclosure: None

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