Cadillac is reportedly studying new models

Published 4:00 am Sunday, January 9, 2011

SOUTHFIELD, Mich. — Cadillac, General Motors’s luxury brand, is studying seven new model concepts to lure new buyers and build on the fastest sales growth among premium carmakers, two people familiar with the plans said.

The brand has looked at a small sport-utility vehicle, a large flagship sedan, a subcompact car to rival BMW’s Mini Cooper, and a Cadillac version of the Chevrolet Traverse and Buick Enclave SUVs, said the people, who didn’t want to be named because the plans are private.

Cadillac is studying the models after sales rose 35 percent last year, topping all luxury automakers, led by the SRX sport- utility vehicle and the CTS coupe. The brand is seeking to ease reliance on those models, which accounted for 66 percent of its deliveries, and lower the age of its average buyer from 62.

“They understand Cadillac can’t thrive as a one-car and one-SUV brand,” said Jim Hall, principal of 2953 Analytics Inc., a consulting firm in Birmingham, Mich. “They need more product to survive.”

Sedan and compact

The brand is introducing two models next year, a larger XTS sedan and a compact car. Cadillac also sells the Escalade large SUV and the STS and DTS sedans, all of which have become a smaller portion of its sales. The STS and DTS may go out of production in June of this year, according to a forecast by Lexington, Mass., research firm IHS Automotive.

Toyota’s Lexus was the U.S. luxury sales leader last year, with 229,329 deliveries, compared with Cadillac’s 146,925. Cadillac also trails Daimler AG’s Mercedes-Benz and Volkswagen AG’s Audi, which both sell eight models or more.

Cadillac will first look to add to high-volume luxury models, then move onto more specialized categories, said Don Butler, the brand’s U.S. marketing vice president. Butler declined to comment on internal discussions about new vehicles.

“We have got to get the core covered with a compact, a mid-sized luxury car, a mid-sized crossover SUV and a large car,” Butler said in an interview. “That’s 85 percent to 90 percent of the luxury market right there. After that, we will look at opportunities for specialty vehicles.”

Hybrid plans dropped

At last year’s Detroit auto show, then-Vice Chairman Bob Lutz said Cadillac would make a version of the Chevrolet Volt plug-in hybrid called the Converj. That plan was soon dropped, people familiar with the matter said.

Cadillac will gain sales volume with models that already are planned, Butler said. Cadillac should pick up buyers once the brand starts selling the small car that will take on the BMW 3-Series and the Audi A4, he said.

The company hasn’t decided whether to make the small SUV or the subcompact, the people familiar with the matter said. The large SUV, which would use the Chevrolet Traverse’s chassis and frame, is likely to be built, one person said. The models would go on sale about the middle of the decade, the people said.

Cadillac also is revamping its marketing to attract younger, more affluent consumers. The average Cadillac buyer makes $118,000 a year, about $60,000 less than Audi and BMW customers and $73,000 less than Mercedes owners, according to data compiled by Strategic Vision Inc., a market research firm in San Diego.

The average Cadillac buyer, at 62 years old, is younger only than the average customer of Ford Motor Co.’s Lincoln brand at 64, according to Strategic Vision. The typical Audi buyer is 48 years old, and the average for BMW is 50.

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