: "What's a Luxury Car" From Wall Street Journal



c5 rv
01-26-04, 08:15 AM
http://online.wsj.com/article/0,,eyes_on_the_road,00.html?mod=home_inside_today_ us

Interesting article with some quotes from Mark LaNeve of Cadillac. Let me know if you can't access this site due to subscription requirements.

TimsToy
01-26-04, 09:05 AM
http://online.wsj.com/article/0,,eyes_on_the_road,00.html?mod=home_inside_today_ us

Interesting article with some quotes from Mark LaNeve of Cadillac. Let me know if you can't access this site due to subscription requirements.
I can't. Appears I need a subscription.

JJhomer83
01-26-04, 09:06 AM
http://online.wsj.com/article/0,,eyes_on_the_road,00.html?mod=home_inside_today_ us

Interesting article with some quotes from Mark LaNeve of Cadillac. Let me know if you can't access this site due to subscription requirements.

can't see it man

c5 rv
01-26-04, 11:29 AM
From 1/26/04 Wall Street Journal

EYES ON THE ROAD
By JOSEPH B. WHITE

What's a Luxury Car?

What's a luxury car? That sounds like a simple question, but it isn't as easy to answer as it used to be.

Not so long ago, you could define what separated a luxury car from a run-of-the-mill commuter appliance by listing a few features and attributes. Did the car have leather seats? Was it big? Did it have a V-8 engine? Did it have power windows, wood trim on the dashboard and a powerful sound system? Luxury cars had those features, mass market cars didn't.

Today, the lines have blurred. Consider the new Kia Amanti, a large, Korean-made sedan with a face curiously reminiscent of a Mercedes E-Class. It can be had with leather seats and a host of other goodies for under $30,000. Perhaps "Korean luxury car" sounds like an oxymoron, but then so did "Japanese luxury car" before Acura, Lexus and Infiniti came along.

Luxury for everyone means traditional luxury car brands face a challenge to maintain their elite status and their premium prices. Two of the industry's most storied luxury brands, Germany's BMW and America's Cadillac are confronting the challenge in different ways and from different directions.

Helmut Panke, chairman and chief executive officer of Bayerische Motoren Werke AG, says it's not a single attribute such as a big engine or a high price, but "a coherent concept that everything that is done gives you a better, no-compromise solution."

For BMW, he says, the focus will be on being first with innovative technology. He points to the active steering system offered on the new BMW 5 series sedans. This system takes power steering to the next level, by using small computer-controlled motors to vary the steering boost according to the car's speed and position. At low speeds, a relatively modest turn of the steering wheel is translated into a relatively sharp turn of the wheels, the better to get out of parking lots. At high speeds, a sudden jerk of the steering wheel gets dampened into a less severe turn, because the system is programmed to prevent you from flying off the road.

Technological features can give a top of the line car an edge, but not for long. "Technology trickles down and consumers want innovation," Mr. Panke says. Likewise, he says, just offering a lot of horsepower isn't enough to sustain a luxury car's distinctiveness.

"We never have been the brand with the highest horsepower" in a given class, he says. "The harmony, the refinement [of the car] is at least as important as a specific horsepower or torque figure."


In the end, what separates BMW from the pack is not just what you can see or feel about its vehicles, but the mystique the company has developed around its cars over the years. Say BMW, and most people who care about such things will think, "ultimate driving machine," even though you can get an Infiniti G35 with more horsepower than a standard 3-series for far less money.

But mystique more often called brand power is tricky to manage and sustain. BMW, for example, is wrestling with how to bring a new, small BMW model, called the 1-series, to the U.S. The 1 series makes sense in Europe, where government regulations aimed at reducing carbon dioxide emissions, high gas prices and a cultural tilt toward the small-is-beautiful aesthetic make a BMW-branded hatchback seem like a reasonable proposition. But Mr. Panke says no four-cylinder, BMW hatchbacks will be offered in America. "A hatchback in the U.S. is not what BMW stands for," he says.

Mark LaNeve, the executive in charge of General Motors Corp.'s Cadillac division, is coming at the challenge of separating his luxury brand from the "luxury-for-everyone" brands from an entirely different direction, and with a lot more baggage than Mr. Panke's company carries.

Mr. LaNeve, who spent an important chunk of his career at Volvo before joining GM, is well aware of the damage done to Cadillac's mystique during the past 20 years by cars like the Cimarron, which was nothing more than a Chevrolet with extra chrome and a Cadillac badge on the front.

Now, Cadillac is building a new lineup of rear-wheel drive and all-wheel vehicles that isn't shared with GM's low and middle-market brands. Because GM has other brands to serve the demand for near-luxury vehicles priced between $25,000 and $30,000, Mr. LaNeve says Cadillac can build an exclusive image without fielding models in mass-market price ranges as Mercedes-Benz has done and as BMW may ultimately do if it sends a 1-series model to America.

"Part of Cadillac needs to be exclusive," Mr. LaNeve says. "We don't want everybody to have one." That's one reason why Cadillac last year put so much focus on a 16-cylinder show car called the Cadillac 16. It's not that Cadillac intends to build such a car any time soon. But as Cadillac tries to extend its range and grow, the direction will be up, away from the mass market, not down, Mr. LaNeve says.

In the meantime, Mr. LaNeve says, "our big differentiation is design and performance. To create a stronger performance image for Cadillac, the brand will launch "V-series" high-performance versions of certain Cadillac models. The V-series line has started with the CTS-V, which offers a select group of buyers a 400-horsepower version of the Cadillac CTS sedan.

"The next big area for us is craftsmanship," Mr. LaNeve says. That means interiors that are as neatly tailored and as richly appointed as the best of the European brands, and made of materials that look and feel rich, rather than cheap and tacked on.

Mr. LaNeve says it will take time for Cadillac to decisively separate itself from the masses and earn back the trust of consumers who abandoned the brand in its dark days. "We've got to execute two complete [model] cycles" to complete the rebuilding, he says.

"The first generation of Cadillac renaissance products takes you to 2006," he says. Completing the V-series lineup will take until 2007. "Ultra luxury is after that." That sounds like a long time, but Mr. LaNeve says he doesn't plan to wait 10 years to see Cadillac back in the global luxury market's top tier where it can avoid duking it out with leather-clad Kias.