Cadillac Announces Ambitious Growth Plan

Cadillac Division President Johan de Nysschen announced last week at the Beijing Auto Show that the luxury brand will aim for an 11 percent operating margin over the next decade. It is unusual for a division head to provide such details about operating margins, information typically kept close to the chest. De Nysschen declined to discuss specifics of how Cadillac will meet this ambitious goal over the next 10 years.

These projections are part of General Motors’ long term plan to revitalize the Cadillac brand and broaden its appeal. De Nysschen, a former executive at Infiniti, was hired in 2014 to help Cadillac compete with European competitors such as BMW and Mercedes. During de Nysschen’s tenure General Motors CEO Mary Barra has given him broad leeway to operate Cadillac semi-independently from the rest of the company. 2016-Cadillac-CT6-626x382In 2015 Cadillac moved its corporate headquarters from Detroit to New York City as part of its ongoing efforts to differentiate the brand from the rest of the General Motors lineup.

While at the Beijing Auto Show de Nysschen also predicted 25 percent growth for Cadillac in China over the next year. This translates to over 100,000 units sold across the country. While Buick has had success in the Chinese market over the past few years, Cadillac has struggled to break into the emerging market for luxury cars in China.

Michael Adams

Sources:

http://www.businessinsider.com/r-cadillac-targets-11-percent-operating-margin-in-10-years-2016-4

 

7 comments to Cadillac Announces Ambitious Growth Plan

  • schwartzh19

    Evidence of Cadillac’s new commitment to competing more effectively with the likes of BMW and Mercedes can be seen in the brands new dedication to performance as well as sophisticated design. Until recently, Cadillac had lagged far behind the two german brands in the eyes of many car enthusiasts. However in the past few years, models such as the ATS and CTS have been well received, with the CTS Vsport being named as a Car and Drivers 10 Best for 2016. Clearly Cadillac has closed the gap in the high performance luxury market.

  • manleya18

    How does Cadillac plan to increase its appeal in the future in the United States and combat people’s preconceived notion that foreign luxury car companies like Mercedes and BMW may have better products than Cadillac? Who is the target market for the re-vamped line?

  • adamsm19

    The targeted market for Cadillac currently is young urban professionals, thus explaining Cadillac’s decision to relocate its headquarters to New York City. That being said, Cadillac continues to have a large customer base of people over 50.

  • barnettt18

    What makes General Motors’s place in the Chinese marketplace so large? It is a cultural interest in Cadillacs among the Chinese people? In the increasingly global economy, it is important to keep in mind the role of American automakers in other countries and their intersections with multinational cultures.

  • helgansg18

    Was the moving to New York City purely based on the idea that it would allow them to differentiate themselves from the Detroit powerhouses? Do you think this will be effective especially because the corporate taxes in New York City are most likely much higher than the ones in Detroit?

  • platte16

    I think Cadillac has lost much of it’s appeal with the younger generation. For our grandparents’ generation, owning a Cadillac was a symbol of wealth. However, now with the immense possibilities of luxury cars from around the world, many do not view Cadillac in the same light. By separating themselves form GM and moving to a city known for it’s wealth, Cadillac appears to be trying to revert back to that image.

  • Brand management is a fascinating topic. How do you differentiate yourself from other products? What can be done in marketing and design? How can that be done without losing the economies of scale in production and technology from sharing platforms and modules at the (global) GM level that don’t carry the Cadillac badge?

    As to China, Cadillac was a well-known brand before 1950. But overall GM managed its entry into the Chinese market very well, that is a fascinating study in part because it entailed a large degree of local operating autonomy. See a book I’ve used in Econ 274 / China’s economy for its good depiction of manufacturing and marketing in the Chinese context: Dunne, Michael. American Wheels, Chinese Roads: The Story of General Motors in China. New York: John Wiley & Sons, Inc., 2011.

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