Automotive News - February 25, 2008 - (Page 17)

FEBRUARY 25, 2008 • 17 Caddy chief’s goals: Build on CTS, prestige, high-tech Cadillac’s hot new CTS sedan is giving dealers an opportunity to boost profitability after a dismal 2007. And Cadillac will launch the CTS-V and Escalade Hybrid SUV later this year in hopes of adding to the sales surge. Cadillac General Manager Jim Taylor says he plans to issue a threepronged challenge to dealers: 1. Keep the CTS momentum going. 2. Boost brand prestige with the highend Platinum series. 3. Emphasize Cadillac’s technology leadership with hybrid, flex-fuel and fuel cell powertrains. Taylor spoke with Staff Reporter Jamie LaReau about his vision for Cadillac’s future. How has CTS production changed since we spoke at the Detroit auto show? We were able to find a way to squeeze out 7,500 more. We’re up in the capacity, and we’re able to address the number-one dealer issue. They’re very frustrated because they know they can sell way more than they have. We weren’t sure where the ceiling was on this. I’m not in a big hurry to run this thing up and then find out we’re sitting on too many cars. What’s the CTS mix like? We’re running a richer mix on the engine than we originally forecasted. Transaction prices are better than we expected. Dealer margins in real dollars are higher, so the customers are really looking at this vehicle positioning with the imports. One fun fact is the red paint. We typically run 5 to 8 percent red. But we did all ads in red, and so we are running 18 to 20 percent red now. Cadillac truck sales have been good, but the car side has struggled. How do you get back into passenger cars? We’ve got to continue the momentum with the CTS. We are on a roll — not just a sales roll but a brand roll. The pickup on important marketing metrics like brand image, brand respect have kicked up very nicely and are reflecting the CTS rollover. The next thing is to keep working on this premium image and the gap we have to fill to get on the same stage as BMW, Mercedes and Lexus. The Escalade has closed that gap. Where we have our gap is in the car lineup. So this year’s emphasis at my meeting is that as we bring out the Platinum series that we already brought on the DTS and are expanding to the Escalade in about a month, that we remind the dealers that those upper-end editions raise the overall equity of the lineup. The third area is technology leadership. The Escalade Hybrid, a Two Mode hybrid, will be a prestige halo and technology leader. It will also get an E85 flex-fuel version on the Escalade, which gives us another chance to talk up our technology. And the Provoq will give us leverage. It’s a concept vehicle, but it reminds the real world that advanced fuel solutions like fuel cells are important to Cadillac. And if GM does decide to produce fuel cells, we’ll be the first brand to get it. GM has said it is spending $69 million on its Moraine, Ohio, plant to make a new Duramax 6.6-liter V-8 turbodiesel engine to meet stringent emis- questionanswer Jim Taylor: “We’ve got to continue the momentum with the CTS. We are on a roll — not just a sales roll but a brand roll.” sions standards in 2010. You spoke before about considering diesels for Cadillac cars in the United States. Does this advance that consideration? This engine is not anywhere in our lineup. Given that all of our cars will have diesels, but only for Europe, we’re actively studying what it would take for those to be sold in the U.S. Profitability has been a dealer concern. Do Cadillac dealers face profitability issues this year, and how can you help them in that area? When we look at year-over-year profitability for our Cadillac dealers, it was essentially flat. If this (CTS momentum) continues the way it started on the car side this year, their profitability should be up. So with carrying costs going down and with margin improvements, that should help. It’s an optimistic look, and it should be up. What are your sales goals this year? Our retail sales came in around 187,000 in 2007, and a couple of years ago it was 192,000. So my challenge is to get it back up past 190,000. What products are still missing from Cadillac’s lineup? We gave you an indication of that with the Provoq model. The entrylevel crossover is a space where everyone is headed. We have our SRX to cover the top end, but we don’t have the lower end covered. That is the product we’d like to have as soon as possible to attack what is the highest growth space and what could one day be the highest volume. We need to get the merger of the STS and DTS done and re-emerge as a solid prestige competitor. What about a car sized and priced under the CTS, a baby Cadillac? I was first kind of consistent that we didn’t need one — it would need to be $25,000 to $30,000, which is a pretty cheap Cadillac. But as the CTS moves up to be $30,000 to $40,000, you are creating space for a smaller Cadillac. So it is starting to be emerging on the list as more viable to me. c http://www.techtextilna.com http://www.mondigroup.com http://www.mondigroup.com

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Automotive News - February 25, 2008 Chamco's 'consultant' is forced into limelight Group 1, Gulf States clash Dealer profit stuck in neutral Ghosn: Autos are in recession NHTSA investigates Toyota, Pontiac cars' windows The upside of upside down: Better belts Push buttons will alter interiors Schwarzenbauer leaves Porsche for Audi CSM: Cuts in auto output to ease in 2nd quarter Ford's Hispanic ad campaign takes it to the mat Hydrogen slips as a solution for the greening of autos Kia to spend big to upgrade dealerships GMAC: Office cuts won't affect dealers LaSorda: Chrysler's $700 million axle plant is 'going up' Toyota hybrid battery partner boosts output Buick may add a car below the LaCrosse Toyota could add 2 more small vehicles to U.S. lineup Calif. regulators shoot for 40-plus mpg by 2020 Loyalty/conquest: Power's best, worst Chrysler firm on retrieving tools from Plastech Former NUMMI exec applies Toyota ideas to aircraft industry Kozyra's resume reflects volatile supplier climate Obituaries Chrysler, Plastech now have chance to work together Do it the NADA way Hail, Geneva; spring must be near Volt's potential is unlimited The Volt is terrific; give GM a hand Beware of high tech running amok Teach reporters half full/half empty Dealer wants to view Conti exec: Inside, it's about the info Dealers Caddy chief's goals: Build on CTS, prestige, high-tech Geneva looks like another green scene Volvo XC60 system senses impact, hits the brakes Saab 9-1 concept awaits green light GM: Supply of vehicles to certify will stay steady Used-vehicle supplies up, prices down in Jan. Black Book plans daily updates Cars.com rolls out video service Manheim launches search tool Luxury sales channel is high on GM agenda GM seeks dealers' help with 5-point green plan Northwood offers dealer MBA Court rejects Chicago dealer's appeal Taxes distort Jan. sales in Europe Nissan to cut designers NHTSA studies window woes Bank: Autos easier to afford VW labor boss gets jail term Delphi sells 2 units Toyota Tundra had tough Jan. Chrysler's white knight: We're investors, not heroes Ford's 'Knight Rider' is Sync on steroids GMAC parties have lost a bit of their pizazz Global warming? It's a crock - but . . . Nardelli's NASCAR debut is a winner A frosty reception for the TSX

Automotive News - February 25, 2008

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