Now That Electric Cadillac Can't Compete With Tesla, GM Tries Frequent Flyer Miles

NLPC ^ | October 7, 2014 | Mark Modica

[jazusamo]

Cadillac sales continue to sputter at General Motors. In fact, the brand is the only make at GM that has seen a year over year sales decline for the period ending in September at a time when the auto industry was booming. Specifically, Cadillac has logged in 127,837 sales for the first nine months of 2014 compared to 133,414 in 2013 for a sales decline of 4.2 percent. GM will now offer frequent flyer miles to help spur sales at the division.

The marketing move at GM follows a decision to relocate Cadillac's sales team to New York City. That move, along with the renaming of Cadillac models, was criticized by Automotive News as follows:

It is most disappointing that the new head of Cadillac had this decision thrust on him without any chance to evaluate the situation or get some wise advice from outside the company -- from his dealers, for example. It would appear that he had no choice in the matter.

The success of Cadillac is going to be product -- pure and simple. Create great products for the dealers and customers, and GM will see a resurgence of the brand. It would seem foolhardy to put the marketing folks as far away as New York so they can be completely ignored on all product decisions.

The article seems to state a very logical strategy to succeed in a very competitive industry; that is to create vehicles that offer the best value. The political minds (embedded by Team Obama after the bailouts) at GM never seem to grasp this one simple theory. Just look at the previous losing strategy at Cadillac of trying to hype the commercially non-viable ELR (a gussied up Chevy Volt) to help drive showroom traffic. Other than from the media, interest in the ELR has been practically non-existent.

The Cadillac ELR was hyped as GM's green alternative to the plug-in Tesla. A piece by one of GM's media proponents ran in November of 2013 titled Watch out Tesla, here comes Cadillac's ELR. It comes as no surprise to me that Tesla had nothing to worry about. So far in 2014, Tesla has sold about 11,000 Model S vehicles compared to an embarrassing 885 Cadillac ELR sales. Yes, that paltry ELR sales figure is for the entire year.

I find it hard to believe that GM's management is that inept that they really thought a $75,000 Cadillac version of the Chevy Volt would actually be a big seller. To really get a laugh at the performance of the ELR, watch the end of the TFL Car videowhich has the excited commentator exulting over the cars blazing zero to sixty time of 9.4 seconds. "I thought it was faster than 10 seconds; yes, yes; now we're talking!"

Tesla's Model S does a zero to sixty in about 5 seconds. With performance standards so low at Cadillac, is it really a big surprise that they are struggling? Other than the excited test driver in the TFL video, there are not many car enthusiasts that would be impressed with a zero to sixty time of 9.4 seconds for a $75,000 car. That brings us back to the question of whether or not GM really thought they had a winner with the Cadillac ELR. Why would they invest millions of dollars in advertising if they didn't?

Earlier this year, a debate raged about a controversial Cadillac ELR ad that ran during the Winter Olympics. The debate should have focused on why GM was even running ads for the ELR instead of about the quality of the ad. The only reason to spend millions of marketing dollars on a car that sells at a rate of about a hundred a month would be to drive showroom traffic to dealerships. Whether GM management believed the ELR would actually be a viable competitor to Tesla or they believed controversial ads would drive sales of other Cadillac models, they have once again proven themselves out of touch.

Sales of the Cadillac ELR have been so dismal that supply of the vehicle had bloated to 725 days; practically unheard of in an industry where 60 days is considered optimal! GM offered dealerships $5,000 each just to spur test drives. And we should never forget that taxpayers help subsidize the affluent buyers of Cadillac ELRs with a federal tax credit of $7,500 each.

Now we have GM management looking to right the Cadillac ship. GM teams up with American Airlines and gives away frequent flyer miles just to test drive a Cadillac. The cost to GM is undisclosed and probably is not included in their incentive spending figures. Add to that the seemingly desperate moves of changing the scenery for the Cadillac marketing team to NYC and the renaming of vehicles. One has to wonder if the politically-conditioned minds at GM will ever realize that the key to success in the auto industry is very basic. Build the best vehicles at the best values.

Mark Modica is an NLPC Associate Fellow.

[jazusamo]

When I saw the headline I thought the 'Frequent Flyer Miles' was a joke but it's for real. Sheesh.

[LogicDesigner]

Does anyone else find it interesting that NLPC.org, which is primarily funded by oil billionaire Richard Mellon Scaife, puts out anti-EV articles like this on a regular basis? I really wish republican politicians were less dependent on oil-money campaign donations. Then we might see some honest, unbiased conservative thought when it comes to electric cars.

After all, if electric cars caught on in a serious way, it would put the petro-dictators of the world in the poorhouse.

[ctdonath2]

the excited commentator exulting over the cars blazing zero to sixty time of 9.4 seconds

My humble Nissan Leaf does 0-60 in 8 seconds (and feels like less). Heck yeah I'd expect a car costing 2.5x should do it in 5, not more.

[Mariner]

While I would rot in the gutters of hell before I would buy another GM product (used to buy nothing but GM), it looks to me like Cadillac is, at least, still one of the PREMIER makes in the world.

Is Price the issue, or are folks like me and sour on Government Motors?

[jazusamo]

LOL! They’re just getting the truth out.

Get back to us IF electric cars catch on in a serious way.

[Da Coyote]

“After all, if electric cars caught on in a serious way, it would put the petro-dictators of the world in the poorhouse. “

Not an engineer, are you?

No matter, it appears there aren’t too many at GM either.

Corvettes excepted, of course.

[jazusamo]

I honestly don’t know why Caddy sales have been taking a beating other than the ELR. It’s nothing more than a frilled up Chevy Volt at over twice the price.

[right way right]

Cadillac lost its brand loyalty by selling crappy engines that stretch head bolts and cause head gasket failures for too many years.
A $5000 repair.

[ctdonath2]

EVs have their place, and much of the US currently isn’t. Atlanta (especially the wealthier northeastern suburban sector) is darned near overrun with EVs, with an optimal balance of commuting culture (public transport is dysfunctional), commuting distance (well within the limited EV range), financial savvy (huge tax credits IF you can swing the cash flow required), and moderate temperatures. The Nissan Leaf dominates, with Tesla being what everyone really wants, and a smattering of Volts and other EVs seen on occasion.

[blueunicorn6]

If GM got rid of the UAW, I might look at a GM car. Until then, no deal.

[Stevenc131]

For folks wanting a semi-viable electric, the story points out there’s the much higher rated Tesla for about the same price. For the yuppies who want an urban run around electric, the BMW i3 is available for $40K. There was no way a rebadged Chevy Volt listing for $75K was going to find a place in the market.

[LogicDesigner]

“LOL! They’re just getting the truth out. Get back to us IF electric cars catch on in a serious way.”

The truth? Yea, right. Having an oil billionaire tell you that electric cars are no good is like Coke telling you that Pepsi is no good.

The author of this article, Mark Modica, has been writing for NLPC since October 2010, a couple of months before the Volt was released. He has written 277 articles in that time. Want to guess how many of those articles are anti-EV or anti-GM?

100%

That's right, this guy's full-time job is posting anti-EV and anti-GM articles. Does it surprise you that his boss is Richard Mellon Scaife, the oil billionaire? If it does, then I have a bridge I would like to sell you.

[Fresh Wind]

Maybe they should have called it the eCimarron.

[ctdonath2]

Performance is the issue. 0-60 in 9.5 seconds is pathetic, when a comparably-priced car (Tesla) does it in half the time, and the common “cheap” alternative (Leaf, at about half the price) is also faster.

[ctdonath2]

the BMW i3 is available for $40K.

Really? Dang. I'm delighted with leasing my Leaf, and that's about $30K retail. Nice to know a peppy & luxury alternative is just $10K more.

[jazusamo]

Absolutely and people were commenting about the Cimarron before the ELR was in the dealer showrooms.

[Mariner]

"Performance is the issue"

Not in a REAL Cadillac.

Each and every one hauls a$$.

Hell, they make a 550+hp/550+ lb ft supercharged V8 that will launch a CTS 0-60 in 3.9 seconds.

That's about fast enough for anybody.

They make a modern STS with the same engine. It's PLENTY.

[Yossarian]

NLPC has been against the whole GM bailout and crony capitalism in the car industry from the start.

Now, try to think logically, “LogicDesigner”...

What is the relative balance of GMs fleet, between electric vehicles and oil-dependent vehicles?

A very simple analysis would tell you it is much more weighed to the latter than the former. Therefore, if all NLPC wants to do is trash the concept of electric vehicles, and increase petroleum sales, then they certainly should have THANKED the federal government for “saving” (cough) GM.

What’s most amazing of all with your post is that you attribute NLPC for being able to influence the electric vehicle market. The truth is, that even WITH the crony-capitalism advantage of taxpayer subsidies, the vast majority of electric cars are lemons in the market. No amount of propaganda - one way or another - would influence the rejection the market is outright giving many of these cars.

[Yorlik803]

Looks like I am buying a Ford Fusion. Cant even look at GM because of the recalls and gov bailout. The Fusion is a sweet ride and got all sorts if goodys.

[LogicDesigner]

“A very simple analysis would tell you it is much more weighed to the latter than the former. Therefore, if all NLPC wants to do is trash the concept of electric vehicles, and increase petroleum sales, then they certainly should have THANKED the federal government for “saving” (cough) GM.”

This reasoning is absurd. Mr. Scaife, oops, I mean NLPC, has been trashing the Volt since before it was released, back when it had zero sales. The oil industry is smart and they know they have to “nip this in the bud,” not wait until it has a significant marketshare before they start their propaganda.

Judging by how easily people here have treated NLPC as a trustworthy source for years goes to show that it is an effective strategy.

See for yourself, the author has done nothing in the past four years except put out anti-EV and anti-GM articles.