| Break through... to higher sales.
Old article, but a good read:
Cadillac breaks through to younger buyers
By Rick Popely
Tribune staff reporter
Published October 22, 2004, 12:56 PM CDT
After years of sliding downhill because of a lackluster lineup and stodgy image, Cadillac is regaining traction with luxury buyers.
Sales are up 10 percent this year, on top of an 8 percent gain in 2003, and Cadillac has passed Mercedes to rank third among luxury brands. Three years ago it was fifth.
More significantly, Cadillac's traditional older owners aren't fueling the surge.
Owners of import brands and younger buyers who used to shun Cadillac showrooms are stopping in, attracted by a fresh lineup of crisply styled cars and a high-energy marketing campaign.
"The STS is designed for a younger person," said Jordan Bressler, 34, president of a Deerfield sports marketing firm, who used to own a Lexus LS430, the flagship sedan of Toyota's luxury division.
His wife has a Lexus GX470 sport-utility, but now Bressler drives an STS sedan, Cadillac's newest model and the latest in a string of Cadillacs he has purchased the last three years.
Bressler says the Lexus was "a nice car" but bland in appearance and performance.
"It just didn't deliver the handling or the styling for me," he said. "I truly believe the LS430 is designed for an older person."
Turnabout like that represents a sea change for General Motors' luxury division, whose sales and prestige tumbled in the 1990s when well-heeled Baby Boomers flocked to Lexus, BMW, Mercedes-Benz and other imports.
Four years ago, Cadillac's average buyer was 63.
Today, Cadillac's average buyer is younger than 58, thanks in large part to models such as Escalade, a full-size SUV (average buyer age 46), and the CTS, an entry-level luxury sedan with creased styling.
Art Spinella, president of CNW Marketing Research, says Cadillac's youth movement bodes well for the future.
When CNW asks consumers which brands they would like to buy, the average age of those who aspire to Cadillac is 25, lower than other luxury brands and even Toyota's 28. Five years ago Cadillac's average was in the low 40s.
"Obviously, they can't afford it, but they really aspire to the brand," Spinella said of the 20-somethings' fascination with Cadillac.
He credits Cadillac with adroit moves beyond its traditional approach of sponsoring golf tournaments to connect with younger buyers:
Cultivating hip-hop artists to include tricked-out Cadillacs in music videos.
Playing up the popularity of the Escalade among high-profile athletes.
Forging a racier image by using Led Zeppelin's "Rock and Roll" in its television ads, which show Cadillacs kicking up dust instead of collecting it at a country club.
"It was a brilliant stroke to use Led Zeppelin. Now, you just hear a few bars and you instantly think of Cadillac," Spinella said.
But Cadillac has work to do.
J.D. Power and Associates says Cadillac's biggest source of new owners remains other General Motors brands, its traditional pipeline, and more buyers still leave Cadillac for imports than flow the other direction.
The median age of luxury buyers is 52, eight years younger than Cadillac's, and median income is $134,000, 14 percent higher than Cadillac's, Power says.
"They're still not getting the buyers they're hoping to get, the younger Baby Boomers that prefer BMWs and Mercedes," says Wes Brown, an auto analyst with Iceology, a Thousand Oaks, Calif., market research firm. "They're younger than they were, but not where they want it to be."
A potential stumbling block, Brown adds, is that GM may lack the money to crank out new products to keep up with its rivals, especially the more-profitable Japanese manufacturers that typically redesign models every five years.
"The luxury market is incredibly competitive. You have to continually update your products or consumers will very quickly drop you off their radar," he said.
Cadillac's traditional rival has been Ford Motor Co.'s Lincoln brand, but Cadillac is aiming the STS at the heart of the luxury sedan market, where the BMW 5-Series and Mercedes E-Class are top players.
By next spring, Lexus, Acura and Infiniti (Honda's and Nissan's luxury brands, respectively) also will roll out new entries, and Lexus says its new sedan will be more stylish and performance-oriented.
Schryce Crawford-Williams, marketing manager for the STS, admits Cadillac faces an uphill battle against the likes of BMW, Mercedes and Lexus.
"That segment has very loyal owners and entrenched players," she said. "It takes time to change opinions."
But Crawford-Williams says Cadillac is aggressively courting import owners, spending $40 million on marketing programs in the fourth quarter to launch the STS, "slightly higher" than its usual budget.
Crawford-Williams was in Chicago recently to promote the STS through a roving display at office buildings and restaurants, where visitors were offered test drives.
Cadillac also bought space on the back of valet parking tickets at venues such as the Fairmont Hotel and Ditka's restaurant to tout the STS and posted ads in downtown parking garage elevators.
"When you have so many vehicles in a segment, you have to break through," she said. "We're trying to reach the target customer where they work and play."
Poor quality was a key reason younger buyers rejected Cadillac, but that is changing.
Cadillac ranked fifth in J.D. Power's latest vehicle dependability study, which measures problems in three-year-old vehicles, and second in initial quality, behind only Lexus.
Last week, Cadillac placed third behind Lexus and Porsche in Power's APEAL study, which asks owners to rate the design and performance of their vehicles.
In all three Power surveys, Cadillac scored better than BMW and Mercedes-Benz, its main European rivals.
Bressler, the recent STS buyer, insists he hasn't given up any quality compared to Lexus.
"It's just a very solid, very well-made car. It's certainly not what Cadillac used to be," he said. |
