Entry Level Luxury Performance Sedans

dino001

Cadillac is a tragic case of a complete mismatch between aspirations and reality on many different levels. It all starts with pricing not matching the current perception (whether the perception is correct or not, doesn't really matter at this time), production capacity and sales network. They want to be "prestigous", but their production capacity and especially dealer network is a legacy of their heyday well before German and Japanese brands took over that market.

I read that Detroit's problem has always been (across the board for all brands) inability to scale down production to match current demand, which in turn made them incentive addicts. They essentially make a car and then try to sell it. Others often have mindset that they won't make a car until they have some evidence it's actually needed somewhere. It can be a real order (customer's or dealer's - BMW operates that way), deep market studies, or simple case of matching cars that sold (Japanese reportedly do it that way). In other words - they want to (at least virtually) sell the car before making it. Detroit makes it first (because you know, union contracts, sales targets, etc.) and then find a customer for it. Any attempt of changing that mindset, while positive in general long term, requires willingness of taking short or even longer lasting intermediate pain of sales drops, production shutdowns and contract breaks with minor dealers.

For comparison, Tampa Bay (not including Sarasota) has 3 BMW, MB, 2 Audi and 2 Acura, 1 Jaguar store, and only 4 Cadillac stores, which doesn't sound bad. But extend the radius to just 50 miles and the picture changes dramatically: it adds about one dealer for Sarasota for all Germans, one store in Lakeland for BMW and MB, but Cadillac's network grows to 13 stores. Considering sales numbers and it is clearly nuts. May be convenient, but there is no pricing power. I'm sure those dealers are hurting, too. This of course quickly rolls downhill into contentious relationships with customers, as dealer that doesn't have any money will not support their customer.

Cadillac's management keeps wanting to have the cake and eat it. They want large sales, no incentives and high prestige - we all know that ain't gonna happen. You can pick two. They probably know it, too - but their stakeholders are too entrenched and simply unwilling to take the necessary real steps to fix it - they rather pretend doing something and then act surprised that things are not going as planned.

nyccarguy

The sad thing is that Cadillac HAS good products.  Between @graphicguy, @qbrozen, & @ab348 they've got some fans.  Believe me, if there was a problem with any of our posters' cars we'd know about it.  Even the fact that @graphicguy didn't flip his 2016 CTS in its 1st week speaks volumes about the product.

dino001

nyccarguy said:

The sad thing is that Cadillac HAS good products.  Between @graphicguy, @qbrozen, & @ab348 they've got some fans.  Believe me, if there was a problem with any of our posters' cars we'd know about it.  Even the fact that @graphicguy didn't flip his 2016 CTS in its 1st week speaks volumes about the product.

It may be true, but the reality is people don't buy them in numbers produced and those who buy expect pricing below what Cadillac thinks they should pay. So either the cars stay on lots, or they move at prices below expected levels. Something's got to give. Mere wishing is not going to solve it - yet, so far that's all we see from them - trying to charm reality with corporate chants, not real moves.

jpp75

nyccarguy said:

The sad thing is that Cadillac HAS good products.  Between @graphicguy, @qbrozen, & @ab348 they've got some fans.  Believe me, if there was a problem with any of our posters' cars we'd know about it.  Even the fact that @graphicguy didn't flip his 2016 CTS in its 1st week speaks volumes about the product.

I completely agree, but they spent 30+ years destroying the brand, it won't recover overnight.

No one really wants a Cadillac, even if they do want a great driving car.

Edit: Let me rephrase, people who want a great driving car will buy a Cadillac. People who want a status symbol badge won't give Cadillac a second thought and most buyers fit the latter category.

graphicguy

jpp5862 said:

nyccarguy said:

The sad thing is that Cadillac HAS good products.  Between @graphicguy, @qbrozen, & @ab348 they've got some fans.  Believe me, if there was a problem with any of our posters' cars we'd know about it.  Even the fact that @graphicguy didn't flip his 2016 CTS in its 1st week speaks volumes about the product.

I completely agree, but they spent 30+ years destroying the brand, it won't recover overnight.

No one really wants a Cadillac, even if they do want a great driving car.

Edit: Let me rephrase, people who want a great driving car will buy a Cadillac. People who want a status symbol badge won't give Cadillac a second thought and most buyers fit the latter category.

Lots of truth in your last paragraph!

nyccarguy

Well said @jpp5862.  To me, part of the allure of a Cadillac (besides the Escalade) is that they are not status symbols.  You don't see one on every corner.  I'm a car enthusiast.  I'm ashamed to say that when @qbrozen announced that he bought his CTS V-Sport, I had to look it up to find out.  I took a look at the specs and my eyes widened.  I was impressed to say the least.  As @roadburner says all the time, people wear many of the BMWs, MBs, & Audis on the road today.  The ATS looks like a nice car.  I built a Luxury model online with AWD, Upgraded Wheels (the black ones).  The sticker price shoots close to $50K very quickly (as it does on many entry level luxury performance sedans).  If GM is constantly throwing $10K rebates at these cars at the end of the year, why not lower the cost of entry to begin with?

qbrozen

couldn't agree more. No idea why they just don't lower their prices. I mean, rather than try to get 10k people to pay $2k under and 25k people to pay $10k under, just lower them $5k and kill the rebates and advertise the hell out of the fact that you trump the others in comparison tests AND undercut their prices. You lose $270k with the first scenario but have nothing to crow about vs $175k in scenario 2 with a great selling point.

dino001

qbrozen said:

couldn't agree more. No idea why they just don't lower their prices. I mean, rather than try to get 10k people to pay $2k under and 25k people to pay $10k under, just lower them $5k and kill the rebates and advertise the hell out of the fact that you trump the others in comparison tests AND undercut their prices. You lose $270k with the first scenario but have nothing to crow about vs $175k in scenario 2 with a great selling point.

Simple - there is always a hope for a sucker who will pay more. Moreover, there is also fear that lowering the price won't help - people will still ask for further discount. Not to mention 5k is probably more than their profit margin on first production year, perhaps even longer. Last - they still think "It's a Cadillac" means, the sticker has to be high, cause you know, it meant that 30 years ago.

flightnurse

graphicguy said:

Lots of truth in your last paragraph!

CG what has happened with your CTS? Had Caddy made good on fixing it?

Now I like the CTS, but I really think Caddy needs to stop with these half size cars. The ATS is a 3 series fighter, but it's smaller on the inside. The CTS is a 5 series fighter however, it's is smaller inside, and slight larger then a 3 series. I would assume if they want to compete with the 3 and 5 series they need to be competitive on all fronts. For my next car I'm leaning towards the new 5 series, but will look at the A6 and E class, but the CTS isn't on my list until it competitive in the interior space like the other cars.

graphicguy

FN...Cadillac took the '14 CTS back. I was still PO'd but they gave me a new '16 and some pocket money for my troubles. '16 is what the '14 should have been. CTS came out of the blocks about 18 months before it was fully baked, at least in my case.

'16 has been perfect. These new Caddys are really nice cars. They're built well. They use very nice materials in them, they look great, and they perform and handle great. But, that's not what people want from Caddy. They want the Caddy that's in the Escalade.

Not sure I'll buy another, but so far, I'm loving the '16 version.

But, as others point out, it's not enough to build a really good car. Perception is what makes people pony up. Funny, people are willing to buy the most expensive Cadillac, but it's the poorest performer. Again, perception.....

The best Cadillacs are the ATS and the CTS, but people are avoiding them. I know resale is terrible, but I bought my CTS for what a cheaper 3 series or C300 would cost. But, it's as good, and in many respects better, than the E Class or 5 Series.

I saw an M235i convertible at the car show this past winter. If I had my check book with me, I would have bought it on the spot. Luckily, my rational angel replaced my demon by the time I left the car show.

laurasdada

"For my next car I'm leaning towards the new 5 series, but will look at the A6 and E class, but the CTS isn't on my list until it competitive in the interior space like the other cars. "

FN: Add the Jag XF to your lookieloo list. Probably not as spacious as the Germans, but, a really nice overall ride...

graphicguy

@laurasdada....if I decide to go A6/5/E/CTS/GS range again this next go round. I've put the XF at the very top of that list. If Cadillac hadn't come through in replacing my lemon, that's what would be sitting in the GG estate right now.

Beautiful car that drives surprisingly well.

As you say, not as spacious as a 5, E or A6, but about the interior space of the CTS, which is really more than I need anyway.

Mr_Shiftright

benjaminh said:

Luxury sales in April:

1. Mercedes Benz 29,236 +.2%

2. Lexus 24,882 -3.8%

3. BMW 24,851 -7.4%

4. Audi 17,801 +5.8%

5. Acura 16,206 +9.0%

6. Cadillac 11,236 -28.9%

7. Infiniti 10,432 +4.5%

8. Lincoln 9,776 +20.2%

http://www.thetruthaboutcars.com/2016/05/u-s-auto-sales-brand-brand-results-april-2016-ytd/#more-1335338

Cadillac seems to be driving itself into a ditch. Cadillac was #1 in luxury sales from about 1920 until the late 1990s—only 20 years ago.

As most of you are tired of hearing me saying , Cadillac remain relatively stagnant until everyone who bought one in the 1980s is dead. We have about another ten years, if Cadillac can chug along until then.

Another problem, aside from the dubious reputation of the past tarnishing their quite good products of the present, is, as you have all mentioned, unrealistic pricing. This seems to keep their sales figures firmly rooted to the same numbers, year after year.

And say, where's Jaguar? I'm actually quite worried about that company. Let's hope jumping into the SUV market will save them---if that flops, I think you can kiss them goodbye. They are only at 25% of their 2002 U,S, sales figures.

Cadillac, on the other hand, has been pretty consistent, hovering in the 200,000 range per year since 2002. They seem to be on a 175,000 pace for 2016. So, same-o, same-o for Cadillac.

Volvo is at about 70% of its 2002 numbers, and seem to be on an upswing of sorts.

stickguy

If I get a jag, will definitely be a lease, so they only need to survive 4 years more from now!

Volvo, I think they stay. New owners will want to keep the US market in place. New product us helping.

qbrozen

flightnurse said:

For my next car I'm leaning towards the new 5 series, but will look at the A6 and E class, but the CTS isn't on my list until it competitive in the interior space like the other cars.

Where in the interior do you find it lacking? Just doing a quick comparo online, the CTS has 4.4" more front legroom than the E and 4.3" more than the 5. It falls right in the middle with rear legroom at only 0.4" less than the E but 0.1" more than the 5.

laurasdada

The Jag F-Pace, like the XE, is getting very good early press. Automobile Mag (online, at least) has a "first and second" drive impression articles, they're still looking for faults.

While the XE is a handsome, muscular looking beast, I really wish they had gone away from the Germans sedan styling theme of same sausage, different lengths. But, along with the F-Pace, as their likely bread and butter models, can't start too out there, I guess.

My XF, still flawless at 29+ months and ~26k miles. Well, the windshield wipers are due to be replaced, so not perfect!

flightnurse

graphicguy said:

FN...Cadillac took the '14 CTS back. I was still PO'd but they gave me a new '16 and some pocket money for my troubles. '16 is what the '14 should have been. CTS came out of the blocks about 18 months before it was fully baked, at least in my case.

Congrats on the new car, is this one a 4 cyl or 6 cyl?

flightnurse

laurasdada said:

"For my next car I'm leaning towards the new 5 series, but will look at the A6 and E class, but the CTS isn't on my list until it competitive in the interior space like the other cars. "

FN: Add the Jag XF to your lookieloo list. Probably not as spacious as the Germans, but, a really nice overall ride...

I like the XF will give it a look, should have written that.

andres3

benjaminh said:

Luxury sales in April:

1. Mercedes Benz 29,236 +.2%

2. Lexus 24,882 -3.8%

3. BMW 24,851 -7.4%

4. Audi 17,801 +5.8%

5. Acura 16,206 +9.0%

6. Cadillac 11,236 -28.9%

7. Infiniti 10,432 +4.5%

8. Lincoln 9,776 +20.2%

http://www.thetruthaboutcars.com/2016/05/u-s-auto-sales-brand-brand-results-april-2016-ytd/#more-1335338

Cadillac seems to be driving itself into a ditch. Cadillac was #1 in luxury sales from about 1920 until the late 1990s—only 20 years ago.

They need to do something unconventional to win back the trust.

andres3

roadburner said:

I don't know what Cadillac is going to do; they have a world class product but perception is taking much too long to catch up with reality...

A 10 year warranty with a guaranteed loaner/rental when needed would help speed that along.

qbrozen

They aren't all that far off. My caddy has quite generous coverage, actually. 4/50k B-2-B, 6/70k powertrain, and 4/50k included service.

I don't know the answer to this: does anyone else offer 4/50k included maintenance?

I didn't even know any of this when I went to buy the caddy. It was a nice bonus. I've looked at the possibility of extending the warranty, but it just isn't cost effective when what it comes with is as long as it is.

stickguy

Volvo has free service for that long at least I believe. or close to it. VW offers 1 year (used to be 3). Or maybe it is 2 now? They kept changing it.

graphicguy

I get a Caddy loaner whenever I went in for service. Tired to coax them out of a ATS-V they had sitting there as a loaner once, but they said they couldn't.

Mr_Shiftright

Interesting Article: What's Wrong With Cadillac?

qbrozen

stickguy said:

Volvo has free service for that long at least I believe. or close to it. VW offers 1 year (used to be 3). Or maybe it is 2 now? They kept changing it.

This is volvo's:
Complimentary Factory Scheduled Maintenance covers the first three services (10,000 miles, 20,000 miles, and 30,000 miles) at no charge.*

flightnurse

qbrozen said:

I don't know the answer to this: does anyone else offer 4/50k included maintenance?

BMW and Jag, however, BMW will stop the 4/50 after the MY16 cars. will be 3/36

benjaminh

What's going on with Cadillac the past few years reminds me a little bit of Oldsmobile in the late 1990s.

andres3

flightnurse said:

qbrozen said:

I don't know the answer to this: does anyone else offer 4/50k included maintenance?

BMW and Jag, however, BMW will stop the 4/50 after the MY16 cars. will be 3/36

BMW includes wear items though, including brakes and wipers I'm told. However, they do exclude tires.

One salesman kept harping on the free maintenance thing, and I just had to flat out tell him, free maintenance is nice, but it "doesn't sell the car."

roadburner

Wear items are no longer warranted by BMW from 2017 forward.

dino001

Wow, what's happening? Why is BMW cutting maintenance and warranty? This is effectively a price increase. Looks like pushing the lease even harder than before. Also seems like a very weak statement about confidence in this new and improved product. Too many problems with turbo engines? Hoarding cash for a future dieselgate? What gives?

I think that maintenance thing was actually a fairly strong selling point, at least to me, but it might have been too few covered services, leaving cars prone to long term issues and dealers unhappy, because they were unable to upsell during those four years.

stickguy

I thought BMW already leased a very high percentage of cars? If so, makes sense to cut back. Most likely though it was just a way to shave costs without raising prices, and not something buyers will immediately feel.

flightnurse

dino001 said:

Wow, what's happening? Why is BMW cutting maintenance and warranty? This is effectively a price increase. Looks like pushing the lease even harder than before. Also seems like a very weak statement about confidence in this new and improved product. Too many problems with turbo engines? Hoarding cash for a future dieselgate? What gives?

I think that maintenance thing was actually a fairly strong selling point, at least to me, but it might have been too few covered services, leaving cars prone to long term issues and dealers unhappy, because they were unable to upsell during those four years.

BMW is selling cars do they don't have to do the free maintenance any longer, but Jag will have to do it for a while to get people to trust them, I'm hoping that Alfa does the same thing with their cars too. It's nice to know you wont have to pay for anything..

dino001

stickguy said:

I thought BMW already leased a very high percentage of cars? If so, makes sense to cut back. Most likely though it was just a way to shave costs without raising prices, and not something buyers will immediately feel.

They do, but shortening the coverage will make them even more dependent on leases. I'm sure a good extension and certified preowned programs coukd bridge the gap. I just hate "sneak" price hikes, like changing the packaging, or cutting 0.2 inches of width from paper towel or toilet tissue rolls. I like straight talk and treatment, not slight of hand moves.

sda

benjaminh said:

What's going on with Cadillac the past few years reminds me a little bit of Oldsmobile in the late 1990s.

That would be sad as Olds was shut down. Doubt they would do that to Cadillac, but never say never.

kyfdx

dino001 said:

stickguy said:

I thought BMW already leased a very high percentage of cars? If so, makes sense to cut back. Most likely though it was just a way to shave costs without raising prices, and not something buyers will immediately feel.

They do, but shortening the coverage will make them even more dependent on leases. I'm sure a good extension and certified preowned programs coukd bridge the gap. I just hate "sneak" price hikes, like changing the packaging, or cutting 0.2 inches of width from paper towel or toilet tissue rolls. I like straight talk and treatment, not slight of hand moves.

As much as those that really look at the math (like you and me) value the maintenance program, BMW decided that the marketing value of the plan didn't justify their increased costs. They are probably correct. Unfortunately.

cdnpinhead

Maybe BMW will go back to maintenance schedules that help the car last hundreds of thousands of miles, as long as they don't have to pay for it. I'm not holding my breath, however.

stickguy

not happening as long as they are paying for it.

but, nothing stopping you from changing the oil as often as you want to, on your dime!

Mr_Shiftright

Maybe BMW has confidence that their cars are now more reliable than they used to be?

Sandman6472

Saw a beautiful 328i, blue over beige, not sure the year but gorgeous. Having never owned a BMW, will definitely be looking for a CPO unit in a few years once I go into retirement again. By then, my driving should go down substantially so it'll be mostly around town stuff. Just wish they still made the 128 as I love the smaller size, anything from 170" down is my preferred size now as it's usually me in the vehicle or me and the wife as the kids usually meet us in their own rides or we take a couple to our destination.

The Sandman

andres3

dino001 said:

Wow, what's happening? Why is BMW cutting maintenance and warranty? This is effectively a price increase. Looks like pushing the lease even harder than before. Also seems like a very weak statement about confidence in this new and improved product. Too many problems with turbo engines? Hoarding cash for a future dieselgate? What gives?

I think that maintenance thing was actually a fairly strong selling point, at least to me, but it might have been too few covered services, leaving cars prone to long term issues and dealers unhappy, because they were unable to upsell during those four years.

If I didn't know a great Indy Audi Shop then I might feel differently about the value of free maintenance. Also, if the car is totaled early in its life, I don't believe you get a penny for "free maintenance" back. So it could end up being worthless.

I think BMW found that a few too many non-badge buyers are driving the heck out of these cars, and M brakes are very expensive to service and replace (pads and rotors).

dino001

Mr_Shiftright said:

Maybe BMW has confidence that their cars are now more reliable than they used to be?

By cutting the warranty? I don't follow. Maintenance is one thing, but warranty is another.

kyfdx

dino001 said:

Mr_Shiftright said:

Maybe BMW has confidence that their cars are now more reliable than they used to be?

By cutting the warranty? I don't follow. Maintenance is one thing, but warranty is another.

I hadn't heard that the warranty was being cut.... just the maintenance.

dino001

kyfdx said:

dino001 said:

Mr_Shiftright said:

Maybe BMW has confidence that their cars are now more reliable than they used to be?

By cutting the warranty? I don't follow. Maintenance is one thing, but warranty is another.

I hadn't heard that the warranty was being cut.... just the maintenance.

I tried to corroborate and found a confirmation for the maintenance cut and couple of dealers listing new 2017 vehicles with 4/50 warranty and 3/36 maintenance. Looks, like I might have misunderstood. I thought Fligthnurse wrote about both warranty and maintenance being cut, but perhaps not.

flightnurse

dino001 said:

I tried to corroborate and found a confirmation for the maintenance cut and couple of dealers listing new 2017 vehicles with 4/50 warranty and 3/36 maintenance. Looks, like I might have misunderstood. I thought Fligthnurse wrote about both warranty and maintenance being cut, but perhaps not.

IT's not to take effect until MY17, Only the maintenance is being cut not the bumper to bumper warranty, however, I think the bumper to bumper warranty isn't transferable since My16.

dino001

flightnurse said:

however, I think the bumper to bumper warranty isn't transferable since My16.

I think it's the maintenance that's not transferable. Warranty is - essentially all brands have warranty transferable, except there are some exceptions in Kia/Hyundai "extensions" in warranties beyond 3/36, but I don't know the details on those exceptions.

http://www.bmwusa.com/Standard/Content/bmwmaintenanceprogram.aspx?mobileoverride=true

graphicguy

dino001 said:

kyfdx said:

dino001 said:

Mr_Shiftright said:

Maybe BMW has confidence that their cars are now more reliable than they used to be?

By cutting the warranty? I don't follow. Maintenance is one thing, but warranty is another.

I hadn't heard that the warranty was being cut.... just the maintenance.

I tried to corroborate and found a confirmation for the maintenance cut and couple of dealers listing new 2017 vehicles with 4/50 warranty and 3/36 maintenance. Looks, like I might have misunderstood. I thought Fligthnurse wrote about both warranty and maintenance being cut, but perhaps not.

Trying to remember what the maintenance items might be in that 4th year, but BMW saved themselves a ton of money. Probably cut out one brake replacement, an oil change, probably some AWD services, wipers, perhaps some other minor things. But, that 4th year would probably be the most expensive to cover than the previous 3 years combined.

Michaell

graphicguy said:

dino001 said:

kyfdx said:

dino001 said:

Mr_Shiftright said:

Maybe BMW has confidence that their cars are now more reliable than they used to be?

By cutting the warranty? I don't follow. Maintenance is one thing, but warranty is another.

I hadn't heard that the warranty was being cut.... just the maintenance.

I tried to corroborate and found a confirmation for the maintenance cut and couple of dealers listing new 2017 vehicles with 4/50 warranty and 3/36 maintenance. Looks, like I might have misunderstood. I thought Fligthnurse wrote about both warranty and maintenance being cut, but perhaps not.

Trying to remember what the maintenance items might be in that 4th year, but BMW saved themselves a ton of money. Probably cut out one brake replacement, an oil change, probably some AWD services, wipers, perhaps some other minor things. But, that 4th year would probably be the most expensive to cover than the previous 3 years combined.

And, given that a majority of BMWs are leased for 36 months, I don't think they are offending that segment of their customers by dropping the 4th year.

kyfdx

Not covering wear items at all, from what I understand, so no wipers or brake jobs. I've received brake jobs on at least one axle, on every BMW we've had.

If you lease 36/15, you are out of the maintenance plan for the last 7.5 months, if it drops to 3 yr, 36 K

dino001

graphicguy said:

But, that 4th year would probably be the most expensive to cover than the previous 3 years combined.

That's why I'm so disappointed. 3/36 maintenance plans have generally low value, as they cover basic oil change and sometimes air filter. 4/50 plan run into a need of first major service, even on computer based. My brakes are still in good shape, which saved them a bundle (I'm out of 50k already), but many people needed them apparently. There may also be some more fluids to be changed, if your computer senses more severe driving condition.

Wipers are generally cheap, so not much value there, especially that there are some decent aftermarket wipers for $20 or so, but it seems like just pettiness from their part to cut that one. Whatever. I guess dealers can now charge those uninformed good money for their "genuine" wiper and even add "installation fee" for good 30 minutes of hard work of super-certified technician. BTW, this is not first time I see pettiness in their conduct. My navigation (it's older-generation, still hard disk based system) doesn't have a single automotive store (like AutoZone, etc.), or other brand dealerships in it. Just ridiculous, if you think about it.

I'll live, but I'm quite disappointed overall. Just confirms to me - there is no reason for any kind of loyalty. It's all "what you have done for me lately". It's OK, I'll do the same.

stever

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