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Cadillac’s announcement of a new president, Johan de Nysschen, along with the relocation of its headquarters from Detroit to the upscale SoHo district in Manhattan and the launch of an ambitious marketing campaign featuring the controversial slogan “Dare Greatly,” raised expectations significantly.
Despite these high hopes, the past four years have seen America’s oldest luxury automotive brand facing a persistent and subtle decline in domestic sales. This is particularly notable given the booming auto market, where nearly every competing brand has reported record profits.
Declining Cadillac Sales in the U.S.
General Motors has invested billions in efforts to attract younger consumers, yet Cadillac’s sales dropped by 3 percent in 2016. Historically, after peaking in 1978 with sales of 374,000 vehicles, Cadillac has struggled to retain its customer base, facing tough competition from Ford’s Lincoln and a slew of German and Japanese luxury brands that have gradually claimed more of Cadillac’s market share year after year.
In 2016, Cadillac managed to sell just over 170,000 cars and SUVs in the United States—less than half the 374,000 units sold by Mercedes.
However, there is a glimmer of hope. While Cadillac’s domestic sales remained flat despite a thriving luxury car market, the brand has made significant strides in China.
Growing Popularity in the Chinese Market
General Motors has allocated $12 billion towards rejuvenating its luxury vehicle brand, including the introduction of new SUVs. Although Buick holds the crown as the most popular American car in China, Cadillac needed a strong performance to establish its presence.
The challenge is steep, as German brands dominate 75% of the Chinese luxury car market, with Audi, Mercedes, and BMW leading the pack. Nonetheless, Cadillac has managed to increase its market share over the past four years. In 2016, Cadillac achieved its best sales year yet, with a remarkable 46% increase driven by sales of the XT5 crossover, selling 116,000 units and surpassing Lexus to become the fourth-largest luxury car manufacturer in a country of 2 billion people.
Looking ahead, Cadillac aims to nearly double its dealership network in China to 300 locations in the coming years. Additionally, General Motors has opened a $1.2 billion plant in Shanghai, where the new flagship CT6 sedan and XT5 will be manufactured.
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