Cadillac's return to glory after two decades of steadily losing ground to European and Japanese luxury rivals is in large part due to its willingness to tap into the expertise of its suppliers.
In some cases, the same supplier companies that have a hand in the consumer appeal of BMW, Mercedes and Lexus helped General Motors' luxury brand restore much of its lost lustre.
Cadillac will surpass 200,000 sales in 2003 for the first time in many years. And the hot new products keep coming. The SRX sport wagon went on sale in North America recently, following the autumn launch of the XLR luxury roadster, and the January 2002 launch of the CTS sedan. The CTS has been a hit - much like the Escalade sport utility that has surprisingly out-performed the Lincoln Navigator.
The SRX, XLR and CTS represent the vanguard of GM's $US4.5 billion plan to revitalise the Cadillac brand as a whole. For over a decade, new generations of premium luxury vehicle buyers have favored imported brands - especially BMW, Lexus and Mercedes-Benz. By 2001, a year before the CTS hit dealerships, Cadillac had slipped to fourth spot in the luxury sale figures, behind the Germans and Japanese. "Now, our focus is [to] regain credibility and image, put the shine back on the wreath and crest, and re-establish Cadillac as 'the standard of the world,'" says James Taylor, Vehicle Line Executive, Prestige Cars, GM North America.
German, Japanese suppliers come to Cadillac's aid
As well as re-vamping exterior styling with an aggressive, sharp-edged design theme, GM knew high quality and high technology were essential. "What's driving Cadillac's momentum these days? Product, product, product," says Taylor. Getrag and Webasto are independent German companies, noted for high quality and technical expertise. Car Top Systems, responsible for the top stack on the XLR roadster, was formed as a joint venture between DaimlerChrysler and Porsche, but recently became a fully owned subsidiary of Porsche. Denso is a long-term partner of Lexus parent, Toyota. And in contrast to supplier attitudes captured in SupplierBusiness.com's wider study of attitudes towards General Motors, several of those key suppliers say that involvement in the Cadillac project was a positive and rewarding experience.
On the CTS, Getrag's high performance five-speed manual transmission is offered as an option - the first time a rear-wheel-drive Cadillac has been offered with a manual transmission. An executive at Getrag said the overriding aim of the project was to offer "best-in-class in regard of performance." And with Getrag's business heavily Europe-oriented, the prestige attached to the Cadillac programme was a major benefit for the supplier.
Webasto supplies the "Ultra View" panoramic roof on the recently launched SRX wagon. "Cadillac made this a focal point of their strategy, to generate a unique feature for the segment," says a spokesperson for Webasto. Being selected for the programme "allowed us to showcase our innovation on a premium American brand."
Delphi has significant content on all three vehicles, including its more advanced systems, like the ForeWarn system, and MagneRide semi-active suspension system. Notwithstanding Delphi's deep and broad experience of GM processes, GM's former in-house operation saw that Cadillac was trying to do something very different. Bill Hanna, Chief Engineer, Occupant Protection Systems at Delphi, says that the new business with Cadillac is "allowing Delphi to have our divisional strengths of mechanical components and electronic integration come together, to put a lot more intelligent product on the market."
The CTS has already sold around 80,000 units in under two years, more than 30% up on initial projections of 30,000 units annually. The XLR and SRX have both been well received, and in the November 2003 North American luxury sales, Cadillac's 38% improvement over November 2002 put it second only to Porsche in sales growth.
High-level supplier support and realisation of an OEM brand image seems to be working in this instance. GM may hope the formula can be applied to other parts of the business.