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The 1958 Cadillac Eldorado Brougham versus the new Cadillac CT6

Comparing Apples to Apples? Not really. But isn't that the problem? When those '50s examples were built - nothing world wide could touch them. Now . . . ?
2015 - Why Cadillac, Chrysler and Lincoln Will Never Again Challenge in the Luxury Market

by Society Staff - Reprint with permission only.

Why Cadillac and Lincoln Will Never Again Challenge in the Luxury Market
A bold statement? A bit of acid? A truism? Yes to all three. “Those who cannot remember the past are condemned to repeat it.” Winston Churchill. Think Packard, Studebaker, Hudson, and more.

In the last few days both Cadillac and Lincoln have announced potential or soon to arrive models to add to their line—in the hopes that they will chip away at the luxury market held by the likes of Mercedes, BMW, Audi, Lexus and others.

But what it seems is that Cadillac and Lincoln don’t understand is how these other brands have stolen away the consumers in this lucrative U.S. market.

Let’s face it, the results so far have been pretty dismal for our home-grown contenders. To understand this, it is prudent to do a little historical backtracking on when and why our U.S. luxury brands were successful, if not dominant in the market, and then by comparing their current approach to then.

Starting after WWII, the U.S. had a stranglehold on the Luxury market, which at that time, was largely based in the States, because of the devastation in Europe and Japan. The Continent, including victorious England, had a long road to go to recover from the impact of the War on their economy.

So, for intents and purposes, the Luxury market, except for some specialty builders, belonged to the U.S. At that time, there were many U.S. manufacturers of luxury vehicles, with Cadillac, Imperial, Lincoln, and Packard leading the way. Back then, there were two approaches to grabbing market share; develop and offer top of the line, almost hand assembled, quality (Packard, Continental Mk II) or focus on state of the art technology (Cadillac’s OHV V-8). But what singled out all of these cars was that they were the flagships, icons, industry leaders.

In every case, the heads of these brands focused on vehicles delivering a vehicle that lead the way. When Cadillac used “Standard of the World” as their by-line, they weren’t kidding. For all of the late '40s and through the mid-'60s, nothing could top all these luxury brands in the marketplace on features, value, quality, and reliability.

Each and every one of those makers knew that the luxury brand had to offer better quality, more features and options that would not be found in their subordinate brands. Huge effort was made to ensure that.

This thinking brought us cars that stood away from the crowd. And when these makers decided to knock down current thinking about what an auto should provide for the consumer, they did it with their luxury models: Imperial Crown, Packard Caribbean, Cadillac Eldorado, and Continental. They were standard bearers for the entire world.

When companies failed, like Packard, it was because their vehicles no longer reflected state of the art cars, but rather expensive, but unexciting products. Packard’s walking in place after WW II left potential buyers unimpressed. By the time Packard recovered, it was too late.

Somewhere along the way, the Big Three U.S. manufacturers also slipped. They began to offer merely more content laden, staid, and basically uninspiring cars to our market. Soon, these cars were perceived as nothing more than a more expensive version of their entry level offerings.

That is when the European and Japanese manufacturers stepped in. Learning from our successes of the '40s and '50s, they built brands using our own formula and quickly established market dominance. Every time they moved away from the model we had created they lost market share—think Infiniti.

While this was happening, U.S. manufacturers were falling in love with the “spreadsheet” accounting method of designing and building cars. “Why put extra effort into a premium brand when we can make more profit by issuing cookie-cutter luxury cars using our low cost brands’ components?” was their mantra.

Well, as we know, that works for a while, but then the public wises up. The luxury buyer, in particular, wants people to know they own a car, not only with amenities, but with state of the art design, components, and features—and perhaps most of all, is powered by an engine unique to that brand, not shared by lesser versions of that company’s offerings. A Mercedes S500 is not powered by the engine found in a C-Class car, for example.

Even Kia, with their new entry in the market, the K900, has made that car distinctive from all other of their offerings in the areas we’ve discussed. And it is fitted with a 5.0 L 420 HP V-8, unique to the car. I’m guessing they will outsell the latest Cadillac or Lincoln easily.

Understanding that, it is easy to see why Cadillac, and more so Lincoln, and to a lesser degree Chrysler are not market leaders, but market followers. And when you are asking the luxury buyer to pluck down large cash for your entry in the market, if you don’t get that, how do you increase market share? Breaking ground for our U.S. luxury brands is to copy something introduced by the market leaders, and then try to put a “we’re just like them” spin on it. The premium brands have to lead the way and let their lower level brands follow.

Here’s an example. When it was recognized here in the U.S. after WW II that overhead valve V-8s were the future, where were they introduced? Cadillac was first in 1949; Chrysler delivered the Hemi in 1951; and Lincoln’s “Y-Block” followed in 1952. There are numerous examples of these luxury brands being the showcase for innovation, but suffice it to say it was expected that the premium brands would lead the way. And when they didn’t—take Packard who didn’t introduce their modern V-8 until 1955 when all brands across the board had modern power plants . . . well, say “good night Packard”.

Now, what do we have for innovation? A Cadillac with a Corvette motor, a Lincoln w/o a V-8 at all, and a Chrysler with a chassis left over from an early 2000’s Mercedes. That’s not leading the way folks. Announcing a new feature, some neat styling, or body style is, in the vernacular “lipstick on the pig”.

So what can our U.S. luxury brands do to get a better hold on the market? The following is my advice:

  1. When it comes to luxury brands, throw away the spreadsheet. You cannot build luxury cars with the “pinch a penny” approach. You cannot build luxury cars by raiding the existing parts bin. Surely you have to be cost conscious, but if cost is the driver you will end up with what you have now, a bunch of pigs running around with new hairdos.

  2. Get all your marketing staff out of product planning. It is blatantly obvious that the current marketing staff for the big three spend their time looking at the other premium brands and then trying to sell the current batch of warmed-over products as “class leaders. Stop it! You are only fooling yourselves—the emperor is NAKED. You are not fooling anyone. You are selling to a dying audience; people who are living in the past and who THINK your cars are what they were 40 years ago. Soon you will be selling to no one.

    All are trying to access the huge Chinese market, thinking, I believe that they are not sophisticated enough to differentiate. Note to our U.S. luxury brands: if you think you will fool the Chinese, boy, are you in for a rude surprise. They are smart and they can discriminate. They will taste your products and spit them out. Do not use your lesser brands’ success in that market as a benchmark for selling premium products.
  3. Let engineering have a clean sheet of paper. Trust me, those guys know where we are failing, but they don’t have the clout to make it happen. In the past, it was only when the engineering staff of the premium brands had the ability to break ground for the entire company did these brands prosper.  A V-6 from a Fusion should not be the lead powerplant in a Lincoln. A Corvette V-8 with 1949 engine technology should not be the powerplant of choice in a Cadillac. A 15 year-old chassis should not be the underpinnings of a Chrysler 300. There are more examples but we do not have enough space here to list more. 

  4. Study and relearn how the other premium brands attack the market. Those guys copied your 1940-'60s model, guys. You have forgotten how you sold premium brands. You lost the lead, gave up, and are tagging along, looking for the scraps. The only way you can recapture your place in the luxury market is to build luxury cars, not mid-price cars with some extra do-dads.

Until you are willing to take these painful steps, you will be sitting in the corporate board rooms listening to proposals for how you can convince the luxury buyer that you have something they want, instead of showing them that you have something they want.

Take a half an hour and think about what we have suggested here. Perhaps the light bulb will glow. I’m not optimistic. You are rewarded for stock price, not market share or penetration. Thus, you care less about the product and more about profits. That won’t work in your luxury brands—but I doubt you’ll get it—or worse, care about it.

Next: How the heck did the U.S. brands get here? What went so badly wrong?


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