JUMP-STARTING CADILLAC: CADILLAC, TAKING THE LONG ROAD TO RESTORE ITS LUSTER, GAMBLES ON RECLAIMING LUXURY STANDARD STATUS WITH ITS 'ART AND SCIENCE' PUSH.

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When Terri Barclay bought a luxury vehicle, she chose a Lexus RX 300 sport-utility vehicle. Cadillac wasn't on the shortlist, or even the long list, of the 42-year-old suburban Detroit executive.

The competing Cadillac Escalade was too large, Ms. Barclay says. Beyond that, the Cadillac nameplate strikes her as one meant for older buyers or those who want a showy form of luxury.

"Lexus doesn't have that image for me," Ms. Barclay notes. "For me, anyway, it's kind of an intelligent choice for people who are interested in performance and good design -- not opulent, luxury design, but intelligent design."

In General Motors Corp.'s Detroit headquarters, a scant 15 miles from Ms. Barclay's home, Cadillac executives spend a lot of time worrying about people like her. To restore the brand's luster -- and win a place on baby boomers' shopping lists -- the division during the next five years will relaunch its vehicle line with striking new styling.

'ART AND SCIENCE'

The centerpiece of the effort is Cadillac's Evoq, a concept car that made its debut this year. Although Cadillac won't confirm it, the two-seater is expected to arrive in showrooms in 2002.

More importantly, Evoq (pronounced evoke) will provide sharp, assertive styling cues for all models. Its cutting-edge lines epitomize Cadillac's new theme, "Art and science," meant as a brand promise of innovative technology and expressive design, says Cadillac General Manager John Smith, marrying two key attributes that drove the brand when it was at its peak in the late 1950s and 1960s.

"There is no mistaking that [Evoq] reeks of power and attitude," he says, adding that consumers expect Cadillac's design to have "a certain confidence, a level of expression that sets us apart."

"Art and science" will transform advertising, as well, providing a unified theme that will replace different personalities seen in current ads for various models, he says.

Cadillac will debut ads for the new 2000 DeVille, as well as division advertising, on Nov. 15 (see story on Page 33).

"All of it combined represents a very specific bet that Cadillac is making about what it should look like, what it should feel like," says Mr. Smith. "And the Evoq represents that."

GLORY DAYS GONE

If the gamble pays off, GM's luxury division will begin to reverse its long sales decrease, dropping 31.6% from 266,899 vehicles in 1989 to 182,570 in 1998. The goal also is to lower Cadillac's average owner age, now at 65.

Yet Mr. Smith's bet is one that brand experts say Cadillac shouldn't have had to make if the automaker had kept pace with a changing world.

"One of the keys in marketing is to make little steps," says Kevin Keller, professor of marketing at Dartmouth College. "You keep moving forward. If you don't do that, then all of a sudden you find yourself having to make these major leaps in terms of product and imagery, and that's very hard to do."

Unfortunately for Cadillac, many of its steps during the past 25 years have diminished the brand from its glory days when Cadillac's tail-finned 1959 models defined the era.

The '59 models represent "the high-water mark for ostentatious American luxury cars," says James Hall, VP-industry analysis for consultancy AutoPacific. That pinnacle represented a long ascent from the pre-World War II era, when Cadillac was a respected, if not a highly prestigious nameplate.

It trailed the "three P's" -- Packard, Peerless and Pierce -- as well as Rolls-Royce, which was manufactured in Massachusetts during the 1920s, Mr. Hall says. But Cadillac steadily built on its "Standard of the world" ad theme, dating back to an award it won in 1908 for precision engineering.

Six years later, a Cadillac ad created a new gold standard for auto advertising. "The penalty of leadership" was initially penned on the back of an envelope during a train trip by Theodore MacManus, founder of a forerunner agency to D'Arcy Masius Benton & Bowles, Troy, Mich., which still holds the more than $200 million Cadillac business.

'SYMBOL OF AFFLUENCE'

After the Depression and World War II, many of Cadillac's competitors fell by the wayside. Bolstered by their parent corporations' financial strength, Cadillac and Ford Motor Co.'s Lincoln emerged as the dominant U.S. luxury brands. By 1956, the last of the three "P" brand names, Packer, disappeared.

Often leading in engine innovation and luxury options, Cadillac cemented its reputation for lavishness with the 1957 Eldorado Brougham, which sold for $13,074 (more than $75,000 in today's dollars), says Mr. Hall. It included such features as air conditioning, "favorite position" memory seating, crystal drinking glasses with magnetic bases and an atomizer filled with Arpege perfume.

That positioning dovetailed neatly with the postwar prosperity of the 1950s. "As a badge, [Caddy] really was one of the symbols of affluence," says Mr. Keller. "Cadillac was a status symbol for that generation."

Advertising at the time began to stress the affordable luxury of a Cadillac.

"Only time tells the full story of its economy," crowed a circa 1950s print ad that shows the car with inset jewels from Van Cleef & Arpels. The copy stressed that although Cadillac is a status symbol, it also offers dependability, long life and good gas mileage.

Although not enough of the latter. By the 1970s, when oil shortages and new federal regulations governing fuel economy and emissions led a shift to smaller cars, Cadillac's fortune began to change. Fuel-efficient models gained a following; some pointedly illustrated the disadvantages of large cars in their advertising.

A 1974 Mercedes-Benz print ad bears the headline: "Suddenly everyone wants a car with sensible size, reasonable weight, good mileage and safety. The Mercedes-Benz." Copy boasts that "A 450SE gets better mileage than any domestic luxury sedan."

That's in stark contrast to Cadillac, running a series of testimonials from its owners. In one, a physician stresses the marque's traditional values: "I like a big car. . . . I believe in buying a big, substantial car that also has weight to it, because on a trip I want to be in a car I feel comfortable in."

STUMBLING ALONG

In trying to adjust to the new reality, Cadillac stumbled several times, delivering products that disappointed -- or even angered -- buyers.

Cadillac's response to fuel and emissions concerns, for instance, was the 8-6-4 engine, an eight-cylinder motor that would be computer-controlled to cut down to six, or four, cylinders when less power was needed. The technology was feasible, Mr. Hall says, but performance was erratic, spawning negative publicity.

A diesel engine Cadillac developed in that era spurred a class-action suit by owners.

As Cadillac struggled with technology, it took a second hit. European luxury and near-luxury makes, such as Mercedes-Benz, BMW, Saab and Volvo began making serious inroads. With comparatively subdued styling, they attracted what Mr. Hall calls "disaffected yuppies who didn't want to drive their parents' car."

'PATROL BOATS'

Not only did Mercedes and BMW tap baby-boomer tastes with styling and European cachet, they positioned themselves as up-market from Cadillac by offering higher priced models, notes brand guru Jack Trout, president of consultancy Trout & Partners. That struck the right note in a yuppified decade of conspicuous consumption.

"Suddenly, the world changed and [Cadillac was] caught selling patrol boats," Mr. Trout says. "They lost the prestige market. The other guys showed up on top of them."

For 1999, Mercedes' top-end CL600 coupe has a $137,895 base price and BMW's 750iL starts at $92,670, while Cadillac's most expensive model, the Seville STS lists at $48,720. That leaves purely prestige-oriented buyers shunning Cadillac, Mr. Trout says.

A second wave of import competition hit when Toyota's Lexus division and Nissan's Infiniti arrived in the 1980s. That added a new wrinkle, with sticker prices lower than the most prestigious European models but with the Japanese makers' reputation for quality.

Today, Cadillac faces a "much more complicated competitive environment" than in its heyday, says David Cole, director of the University of Michigan's Office for the Study of Automotive Transportation.

CHALLENGES PERSIST

Even so, the challenges since the 1970s persist as core problems. The division's efforts to draw in boomers have been ineffective, as have attempts to return the brand's prestige to "standard of the world" status.

Technology has been the exception.

Cadillac's Northstar power train, Stabilitrak road-handling system, OnStar communications system and other technology are "absolutely leading edge" today, Mr. Cole says.

"It's right out on the front end of the world," he adds. "It's not that they're trying to sell things with smoke and mirrors. They've got very good substance right now."

What's still needed is the sell.

Advertising for "Art and science," says Cadillac's Mr. Smith, will initially emphasize technology. For instance, the new DeVille offers an optional night-vision system that is featured in print ads.

Vehicle-program lead times mean that it will be several years until Cadillac has restyled its lineup. Mr. Smith notes that, while Cadillac may only be able to sell the "science" half of its new formula for the time being, consumer research shows that to be a powerful asset.

"When you put 'Cadillac' and 'technology' into the same sentence, people lean forward and they perk up and they want to know more," he says. "Cadillac and technology really move the needle when people consider the brand."

But the battle to win the Terri Barclays of the world back from imports continues to challenge Cadillac. The division has tried several times to create a smaller model to draw in younger buyers, as Mercedes' C-class and BMW's 3-series do.

Its first try was the Seville, introduced in 1975. Measuring about 2 feet shorter than typical U.S. luxury cars, it had sporty handling -- a promising run at the Europeans, Mr. Hall recalls. The initial print ads stressed its gas mileage -- 19 miles per gallon on the highway, 13 in the city -- and its smaller size.

SEVILLE ADS

Clearly aiming to counter European luxury makes, 1976 Seville ads described the model as "built in America to be at home anywhere in the world" and as being "international size."

But Cadillac eventually backed away from the niche in subsequent Sevilles, apparently wary of hurting its standing with its traditional buyers, Mr. Hall says.

Cadillac's next stab at the niche was the Cimarron, bowed as part of its 1982 lineup. Although Cadillac advertising proclaimed "Best of all . . . it's a Cadillac," consumers were quick to notice that it shared the same body as the Pontiac J2000 and the Chevrolet Cavalier.

The attempt at "badge engineering" not only fizzled with auto shoppers, it undercut the brand's image as a premium product, Mr. Hall says.

"You could drive down the street to the Chevrolet dealer and see the same car with the same engine -- without power windows, without leather interior -- for $6,000 less," he notes.

Cadillac tried again in 1996 with the Catera, a domestic version of the Opel Senator aimed at drawing in women buyers. In trying to duplicate the driving experience for women, the division went so far as to make male GM executives drive the car with paper clips on their nails to simulate the distinctly feminine experience of operating a vehicle with long fingernails.

Although the Catera's lineage is not familiar to U.S. consumers, its cautious styling and D'Arcy-created campaign -- themed "the Caddy that zigs" and featuring a cartoon duck -- drew criticism.

The agency declined comment for this story.

"That was pathetic," comments Dartmouth's Mr. Keller of the Catera effort. "If you think of the marketing campaign, that was just so bad. That was as good as they could do?"

Mr. Keller maintains Cadillac's efforts to pull in boomers lacked urgency and that the division believed the "age effect" would kick in, bringing boomers to the brand, rather than vice versa.

AGE EFFECT

"There are some categories where you can wait them out -- some healthcare products, for instance," he says. "They may not like it, but they're going to come." But Caddy clearly wasn't one of them."I think they took it for granted that there was going to be this age effect," he says.

Catera sales have dipped 39% during the first nine months of 1999, falling from 19,352 to 11,733. However, Cadillac's Mr. Smith says the division plans to stick with the Catera.

Evoq-like styling will make it a stronger player in the hunt for younger buyers, he insists. "The next-generation Catera is just a flat-out knockout."

NIMBLE ENOUGH?

But that model won't go on sale until 2002 and, meanwhile, Lincoln's LS, introduced this summer, is providing strong domestic competition in the niche.

Some observers wonder whether Cadillac is nimble enough to reposition itself. Mr. Hall says the division should have been prepared to move into production of the Evoq much more quickly, as the former Chrysler Corp. did with hot concept cars such as the Dodge Viper.

More recently, Cadillac appeared slow to market with another product that younger buyers craved. Cadillac's Escalade luxury SUV debuted in 1998, trailing the Mercedes M Class and the Lincoln Navigator.

"That was a mistake in terms of product portfolio," Mr. Cole says. "They weren't there when they should have been."

Actually, Cadillac could have been out in front if GM's North American Operations executives had acted quickly on an in-house proposal for a SUV in early 1995, Mr. Hall points out.

"They couldn't get it past the brain trust at NAO," he says. "Cadillac could have sold it and it would have helped."

Mr. Smith acknowledges that Cadillac had a car-based SUV on the drawing boards, similar to Lexus' hot-selling RX 300, but had to move quickly with the Escalade.

"We had that in our plans and then life happened, as John Lennon said in one of his last lyrics: 'Life is what happens when you're making other plans,' " he says. "The SUV market just exploded."

The next-generation Escalade will be closer to the original plan, he promises. But, Mr. Smith maintains, the current Escalade is selling beyond projections and bringing younger buyers into showrooms.

Cadillac's attempts to revive the brand's prestige image have been similarly uneven. In fact, executives' talk about the Evoq as a "halo" model that will enhance the overall vehicle line has a familiar ring -- the same expectations existed for the Allante, a two-seat roadster that debuted in '86.

That car, designed by Italian design house Pininfarina, failed to lift other Cadillac models because it bore little relation to them, a mistake Cadillac appears to be avoiding with Evoq, Mr. Hall says. "There's a huge difference between the two," he notes. "The Allante didn't have any logical connection to Cadillac."

Evoq's "family resemblance" to the rest of the division's lineup is crucial, Mr. Smith says. The concept car's sharply creased lines and generally assertive styling are meant to give the brand a consistent, standout look.

"When we were rocking and rolling back in the '50s and '60s, it was a combination of styling and technical elements that put us there," Mr. Smith says.

CAN'T REPLAY PAST

Cadillac's research still shows substantial affection for the brand, particularly for the innovative, bold personality of its heyday, Mr. Smith says. Even so, Cadillac can't simply replay the past with big, retro vehicles.

Instead, he says, Cadillac must develop a tasteful, yuppie-friendly version of its brand personality in the swaggering postwar era. That's a fine line that many American icon brands have to walk, says Kate Manasin, head of the New York office of Wolff Olins, a London-based brand consultancy working with Cadillac.

'AMERICAN-NESS'

"Cadillac is a great American brand," she says. "There's a little uncertainty among the companies of how to use it, how it fits in. American companies have been told so many times that they're big and they're loud that they sometimes try to bury the American-ness."

Noting that Cadillac has "wandered a few years in the wilderness," Ms. Manasin says the "Art and science" theme is a good expression of American luxury today, combining good design and top-quality products with a casual, less-exclusive social attitude.

"What the new luxury is about is the performance of the product, rather than putting it out of reach of people who can't afford it," says Ms. Manasin. "I don't think it's the price tag."

Mr. Trout suggests that Cadillac might be able to play on that by "repositioning the competition" as cars for people who want to buy prestige.

"I would tell people there's no reason to spend 60 grand," Mr. Trout says. I would just use that 'overpriced prestige' thing on the competition.

"You can't get trapped into this wishful thinking -- 'Oh, if I could only get these boomers who grew up on imports, on BMW and Mercedes.' Live with it and figure out what you can do," he adds.

University of Michigan's Mr. Cole says that, while "it's Cadillac's turn to be in the hot box," the division retains key strengths. J.D Power & Associates surveys, for example, show Cadillac ranks high in customer and dealer satisfaction.

"It's a great foundation to build on," he says. "[Cadillac] isn't that far into the sewer as the popular belief would [have it] be."

Cadillac's Mr. Smith admits that when he took the general manager post in February 1997, it was clear the division wasn't measuring up to its competition. Cadillac executives spent a year studying consumer attitudes to develop a "clear, concise sense of self" that would guide future product decisions and brand-building, he says, winding up with "Art and science."

Developing the Evoq was one step toward recasting the brand. Another was unveiling a new Cadillac crest this summer.

NO QUICK FIX

The division also is developing new dealership designs to convey the new attitude, he says.

Mr. Smith believes that by taking on the Evoq's distinctive personality, Cadillac is breaking from its decades of doldrums. But even with the ambitious product-introduction schedule of the next few years, there won't be a quick fix, he acknowledges.

"It took the better part of 15 or 20 years to earn our way down," Mr. Smith says. "It'll take us a good portion of that to earn our way back."

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