Relying on price cuts to maintain decency, Cadillac can't escape the trend of recession?

Image source: Du Ge

When everyone is ridiculing "if you don't work hard, you can only buy BBA in the future", everyone knows that the situation of the second-tier luxury camp is even more embarrassing, not only the brand voice is gradually declining, but the sales volume is also showing a parabolic downward trend.

Among them, Cadillac, as the "leader" of the second-tier luxury car brands, is also difficult to escape the recession under the impact of Tesla and "Wei Xiaoli". According to the data, in 2023, Cadillac will deliver a total of 183,600 vehicles in the Chinese market, a slight decrease from 2022, but a lot lower than the achievement of more than 230,000 units in 2021.

According to the data of compulsory traffic insurance, compared with 2022, among the fuel vehicles sold by Cadillac last year, except for the CT5, the number of accidents is basically declining. The pure electric SUV model LYRIQ Ruige has failed to become a climate, with a total of only 2,972 units. The former "presidential car" is being surpassed by opponents in the new energy era.

Cadillac's current situation is caused by multiple reasons, among which the long-term "price for volume" is considered to be the culprit, and there is even a joke in the market that "seven folds leopard, eight folds tiger, and Cadillac five folds", this practice of self-depreciation has buried hidden dangers for Cadillac's future.

On the other hand, the unsmooth transition to electrification has also made Cadillac slowly lose its future. Although Cadillac has made great efforts to market around the Aoteneng pure electric platform and LYRIQ Ruige, it has never been able to achieve the expected results.

If in 2023, Cadillac can still maintain its basic market by cutting prices, then in 2024, when the competition is becoming more and more fierce, will it be able to maintain its dignity?

1

It has a number of world firsts

●

In the long history of the automobile industry, Cadillac is the pinnacle of American luxury cars. Since its birth in 1902, for more than 100 years, it has created many firsts in the industry and created many luxury car industry standards.

Cadillac's story began at the end of the 19th century, when a company called Detroit Motors was founded, which was the predecessor of Cadillac, and laid the foundation for the brand's beginnings.

In 1902, in honor of Anthony Mens Cadillac, the founder of the "Automobile Kingdom" Detroit City, the Detroit Motor Company officially adopted the name "Cadillac" and built the first Cadillac, which was modeled after the Ford Model A, and was sold out at the New York Auto Show the following year.

For more than a century, innovation in design and technology has enabled Cadillac to maintain its leading position in the automotive industry.

For example, in 1905, Cadillac launched the world's first multi-cylinder engine model and the first all-inclusive model; in 1908, it was the first to mass-produce cars with standard auto parts, which became a model for later standardized production; in 1912, it invented electronic starting, lighting and ignition devices; in 1915, it was the first to introduce tilt-beam headlights; and in 1917, Cadillac was selected as a standard-seat car designated by the American generals......

And that's not all, Cadillac brought the world's first mass-produced V8 engine, the first hydraulic automatic transmission, the first low-pressure freon shock absorber, the first self-adjusting brakes, the first car heating and cooling system, and so on.

In Cadillac's own official website, it is said: "Cadillac continues to break through the stereotypes and promote the development of the automotive industry from the past to the future with innovative technology again and again." ”

Because of this, Cadillac has become a large luxury car and special car for many American presidents, diplomats, ambassadors and foreign dignitaries.

For example, in 1919, President Wilson returned to the United States in an eight-cylinder gasoline car with a Cadillac Type 53, in 1983, two exclusive cars for President Reagan were based on the Fleetwood Extended Edition, a Cadillac flagship sedan, in 1993, President Clinton customized an exclusive car based on the Fleetwood Brougham, and in 2009, Obama made his Cadillac One debut at his inauguration.

In addition, film and television stars such as "Elvis" Elvis Pressley and sexy goddess Marilyn Monroe are also loyal fans of Cadillac. It is said that "Elvis" bought at least 100 Cadillacs in his life, some for himself, and some for relatives and friends.

However, Cadillac entered the Chinese market relatively late, officially entering China in 2004. At that time, the Buick brand, which was also owned by General Motors, had rolled off the assembly line for nearly 6 years with the first domestically produced Buick New Century sedan.

Fortunately, Cadillac's localization action was very fast, and in 2005 it began to try to localize, bringing two models, CTS and SRX. Later, in 2007, with the launch of the completely domestically produced SLS Saiwei, Cadillac's localization road was officially on the right track.

In 2010, three years after localization, Cadillac's performance ushered in a rapid progress, with sales of 17,400 units in China that year, a year-on-year increase of 139%, followed by sales of more than 50,000 units in 2013, 80,000 units in 2015, 110,000 units in 2016, and 220,000 units in 2018, becoming the fourth luxury car brand to sell more than 200,000 units annually in the Chinese market after Audi, Mercedes-Benz and BMW.

There is no doubt that Cadillac at that time was a "dark horse" in China's luxury car market, and it was worthy of the title of "second-tier luxury brand leader".

2

Rely on price reductions to keep the fundamentals

●

Cadillac's highlight moment in China is 2021, even in the face of severe challenges brought about by the global chip shortage, Cadillac's cumulative sales that year still reached 233,100 units, setting a new annual sales record.

The "New American Luxury Rear-Drive Sedan Family" consisting of CT4, CT5 and CT6 sold a total of 94,600 units throughout the year. Among them, the star model CT5 sold 62,100 units throughout the year, a year-on-year increase of 37.9%, leading the mid-size luxury car segment.

The "New American Luxury SUV Product Matrix" built by XT4, XT5 and XT6 has also achieved excellent results. Among them, the cumulative annual sales of XT6 were 38,000 units, a year-on-year increase of 43.1%, and the market share ranked at the forefront of the market segment.

It's a pity that Cadillac's glory didn't last. In 2022, although it leads the second-tier luxury brand with sales of 185,300 units, it will decline seriously compared with its own performance in the previous year, becoming the brand with the largest sales decline in the second-tier luxury camp.

In 2023, Cadillac delivered a total of 183,600 vehicles in the Chinese market, which will continue to decline from 2022. According to Sina Automobile's statistics on the number of new car compulsory insurance, among the fuel vehicles sold by Cadillac last year, except for the CT5, the number of vehicles on sale was basically declining, and four of them had a double-digit decline.

Moreover, this is still achieved under the sharp price reduction. For example, in March last year, Cadillac launched a preferential activity for clearing the warehouse and reducing prices, and the purchase of cars can enjoy subsidies from SAIC-GM, local governments and dealers, involving six models: CT4, CT5, CT6, XT4, XT5 and XT6.

In May last year, Cadillac's new CT6 was officially launched, and the official guide price was reduced by up to 50,000 yuan compared with the old model; in July, Cadillac officially announced that the price and rights of LYRIQ Ruige were adjusted, and the price of all models was reduced by 60,000 yuan; in December, according to dealer news, the terminal price of Cadillac CT5 reached 90,000 yuan, and the starting price has dropped to below 200,000 yuan......

In fact, this is already Cadillac's basic operation, and for many years, it has never been able to shake off the label of "price for volume", and therefore has fallen into a dilemma.

According to the retrieved information, as early as February 2008, it was reported that Zhejiang Micardi, a Cadillac dealer in Hangzhou, launched a gift package of 30,000 to 100,000 yuan for the Cadillac CTS, and in September of the same year, Shanghai General Motors announced that it would adjust the price and configuration of the entire Cadillac SLS Saiwei series, with a reduction of 10% and 11% respectively.

Later in 2011, Cadillac Ningbo Tasting Center has a batch of Cadillac SLS Saiwei 3.6 and CTS 3.6 models on sale, SLS Saiwei 3.6 direct discount of 150,000 yuan, CTS 3.6 luxury sports model discount of 120,000 yuan, to 2015 or so, including CT6, XTS and ATS-L and other models have joined the ranks of discounts, the main models of the discount strength are about 20% off.

The effect of price reduction on sales stimulation is immediate, but there are also many hidden dangers. One is to affect profitability, the other is to make dealers' profits suffer, and it will also lead to a strong wait-and-see mood among consumers. Knowing that if you wait a little longer, you will get a discount, who will choose a new car at the original price?

According to the "2023 China Automobile Retention Rate Report" released by the China Automobile Dealers Association, Cadillac's three-year retention rate is only 55.47%, which is lower than BBA and other second-tier luxury brands such as Lexus and Lincoln. Among them, Lexus's 3-year value retention rate is 20.49% higher than Cadillac's.

Cadillac's style was quite high at the beginning of its entry into China, but now it has been questioned because of "price for quantity", and was even labeled as the "king of baths" for a time. After stabilizing the sales fundamentals, maybe you should think about how to get back the lost style.

3

The transition is not yet the climate

●

In addition to the impact of "price for volume" affecting brand value, in today's era of electrification, Cadillac's unsmooth transformation has made the future more ambiguous.

In fact, in the luxury car camp, Cadillac is one of the earliest transformations, announcing as early as 2019 that it will be fully electrified in 2030. In 2021, the company announced that it would gradually discontinue production of gasoline-powered models from 2025 to 2026. However, at present, Cadillac only has one pure electric model, the LYRIQ Ruige, on sale, and the results are not satisfactory.

As Cadillac's first new energy vehicle in China, LYRIQ has been highly anticipated. Before the official debut, the official said that LYRIQ embodies the brand's innovative practice of more than a century and a more personalized, interconnected and immersive experience design, which will open the curtain of a new era of Cadillac's intelligent pure electric vehicle with a sense of luxury, technology and futuristic design, pioneering technology and intelligent interconnection, and push the extraordinary travel experience pursued by the brand to a new height.

Later, after the official release, Cadillac LYRIQ Ruige also pulled a wave of goodwill, because it is not like many luxury cars and even joint venture cars to release new energy products that are converted from oil to electricity, but use GM Group's new pure electric platform Ultium manufacturing and production, which is considered to be the pioneering work of the Cadillac brand's intelligent pure electric transformation.

However, after this pioneering work was actually launched, it failed to achieve the expected results. When it was not delivered, it was collectively defended by the owners because of the "mismatch" of the front and rear lights, wheels and other places.

In terms of sales, according to Cadillac's publicity in 2021, the number of orders for LYRIQ Ruige has exceeded 5,000 units after one month of pre-sale. However, the data of compulsory traffic insurance shows that since the official delivery at the end of September 2022, as of the end of 2022, the total number of LYRIQ Ruige vehicles on the road is only 2,461, and the average monthly number of vehicles on the road is about 800.

In 2023, in order to stimulate sales, Cadillac will carry out a wave of official reductions on LYRIQ Ruige, and the price of all models will be reduced by 60,000 yuan, and the result is quite average. The number of vehicles on the risk is only 511 more than in 2022, reaching 2,972. Moreover, 2023 is also the full delivery year of LYRIQ Ruige, and the average number of vehicles on the road is less than 250 per month.

This is definitely not a good result in today's mid-to-high-end new energy vehicle market. There is a view that Cadillac is seriously making electric vehicles, but the heart is higher than the sky, and the price of the first car was 43.97 yuan - 479,700 yuan to scare away a group of potential users.

In order to gain more market share, Cadillac had to make compromises. In November last year, Ruige's new model rear-drive standard endurance luxury version was officially launched, with a price starting at 297,700 yuan. Although the launch of this version of the model has reduced the price of Cadillac Ruige to less than 300,000 yuan, we still have not seen the sustainability of its sales growth.

According to Cadillac's plan, the brand will continue to expand the IQ pure electric family and combine with fuel models to create a product spectrum of "complementary oil and electricity, step by step". The OPTIQ, the next strategic model for the global luxury electric market, is expected to be officially launched this year. And this year, Cadillac will have 3 new models of IQ pure electric to meet everyone.

The competition in the new energy vehicle market has entered a white-hot stage, and the traditional luxury brands have undoubtedly fallen behind.

Author | Lee Lee

来源 | 车圈能见度（CarVisibility）

END