Baffled by Cadillac's decision to change the naming strategy of its future sedans to CT-something? So were we, which is why we recently sat down with the brand's chief marketing officer Uwe Ellinghaus to uncover the logic.
According to Ellinghaus, it's simple:
"As long as the brand isn't relevant, people [will not be] too familiar with the products," Ellinghaus said. "I want Cadillac the brand to be the driver of passion, and not the individual nameplates. That's why we changed the nomenclature."
Ellinghaus, formerly of BMW and pen manufacturer Montblanc, wants it to be transparent to customers where each Cadillac sits on the spectrum, unsatisfied by the ATS, CTS, and XTS' naming.
"I simply wanted alphanumeric to have a hierarchy in the portfolio, so that people know exactly where the car sits, size and pricewise. The common nomenclature does not allow for that.
In addition to discussing Cadillac as a brand, Ellinghaus also confirmed that Cadillac will sell the CT6 alongside the current CTS; admitted the brand's strengths and weaknesses; and described his vision for becoming a BMW alternative, not a copycat, as the brand plans its move from Detroit to New York City.
For the entire interview with Ellinghaus, scroll down:
Do you see Cadillac as a commodity?
I haven't seen Cadillac as a commodity, but it's definitely a brand in transition—a brand that lacked direction, [and] a very simple answer to the question, "What does Cadillac stand for?" My first task was to frame this and get to a brand identity, the few words that Cadillac stands for, our point of view. That was never defined, which is pretty amazing for a 112-year-old brand. That was, maybe, also my biggest surprise when I came. Yet, if I look at the cars we [have], they undeniably have a great personality. But the cars will not sell by themselves, as long as the brand does not resonate with customers and as long as people don't say, "I want to be seen in a Cadillac." They won't even look at the facts and the figures, the performance and the torque. This remains my biggest task in marketing. How do I change the brand perception of people who do not have us under consideration yet?
When you see a new car for the first time, what's your first priority as a marketer?
I was blown away by the quality of the cars. When I got my first company car, an ATS in crimson, I loved it to pieces and still love it to pieces. I also realized that Cadillac was very ambitious in terms of volume and pricing, versus the German competition. I think it's fair to say, coming from a brand powerhouse like BMW, [that] Cadillac did all the right things in terms of products, but they maybe were a little too optimistic regarding the strength of the brand. Upon reflection, the price points should have been slightly more in line with the brand strengths, than just reflecting the product substance. While the product substance of CTS is undeniable on eye level with the 5-series, such is the price point. While that makes perfect sense from an engineering point of view, and a CFO's point of view, we shouldn't underestimate that the brand is probably not yet able to carry the same price points and deliver the volume that we hoped for. I'm not necessarily surprised by our sales performance, but of course I'm not satisfied, either.
What's the easiest Cadillac to sell?
Escalade: The most expensive one is the easiest to sell. To a certain extent, it says it all. The Escalade is almost a brand unto itself. It has so much cachet and prestige, and it's so desirable that we can hardly cope with the demand. I wish I had more product allocation. I could easily sell far more cars than we currently do. The car does not need an explanation. Firstly, Cadillac has had it for decades. It's an iconic SUV; SUVs, declared dead many times, are more alive than ever before. Therefore, it's an easy sell despite the pricetag. The cars—the cars—are unusual for Cadillac. They are smaller, more performance and driver-oriented, and they need to earn their way in. That's the way I always [say] it. We need to give them time. We need the street presence of a couple of years of production, so that people turn their heads around at how much Cadillac has changed.
The lineup is changing, but there's no hatchback or crossover in the Cadillac lineup. What do you think of the Mercedes-Benz GLA?
We have the SRX, of course, which many people call a crossover.
How about smaller?
We want to extend our product portfolio. We will, of course, have more crossovers in the future, both below and above the SRX. Expect that to happen. However, we want to grow carefully. Do not underestimate that a diluted brand image, where we aren't totally clear about what the brand stands for, cannot carry a product portfolio that is as wide as Mercedes', BMW's, or Audi's. While I wish I had more cars in the portfolio, I am by no means saying that our aim is to have the same product complexity that these brands have. To a certain extent, they grew the brands for many decades before they extended into all kinds of niches and segments. There is definitely a "too much," as well, so we happily leave some niches to the German competitors. We need more crossovers, and I think we need badly a car above the CTS, a sedan. We will launch the CT6 next year, the flagship, and I really think we need that car because a luxury brand needs a dream car that is financially not affordable for the majority of its prospects and buyers. But every single ATS owner buys a little of the fascination, so the halo effect is something that we need. In New York, [we'll] unveil the new flagship, with a completely new look and feel for Cadillac, with a completely new display. ... More importantly, we want to focus on our brand point of view, what we are all about, and that's something that Cadillac has never done. Our communication was solely product focused, and we always had strong impulses when we launched new cars, and then we forgot about them. I think that is totally wrong. You need to nurture the market permanently, and you need overarching messages. You need to put the product communication at the brand level to break through the clutter. As long as the brand isn't relevant, people [will not be] too familiar with the products. I want Cadillac the brand to be the driver of passion, and not the individual nameplates. That's why we changed the nomenclature. You can look at the blogs to see what people are saying about me—not that I care—but they're calling me completely mad, which I am. But this isn't evidence of [that]. I simply wanted alphanumeric to have a hierarchy in the portfolio, so that people know exactly where the car sits, size and pricewise. The current nomenclature does not allow for that.
Is there any equity in names like Eldorado?
Yes. There is certainly some equity, but only among customers that still remember these cars—and they are a dying species, in the literal meaning. I really think that, as glorious as our past was having nouns as nameplates, I want to show that Cadillac is looking to the future, rather than backwards. Therefore, reviving these nameplates wouldn't feel right. The cars underneath these great-sounding names weren't anywhere near as good as today's Cadillacs are.
Would you follow a path, like some of your competitors, in creating luxury cars from economy platforms, turning $20,000 cars into $40,000 cars?
We won't do that. Honestly, this dilutes the brand image in the long term. You can mess around with your brand if you're as strong as our German competitors are; in other words, you can build cars that have a lower price point, that do not deliver all the characteristics and qualities that the other cars have, because people want one thing: the cheapest entry into this great and iconic brand. As long as we are an iconic brand, but not as strong as the Germans, we are well-advised to heed one piece of advice: What does it take to win customers over, long-term, in luxury? You under promise and overdeliver. That's why we will not build cars that do not live up to the characteristics that these cars have. Given where we are in terms of brand strengths, people would say, "Look at Cadillac, they mess around." Nobody says that of Mercedes and BMW, yet they do. This is the great thing about having a strong brand, before people realize that there are cars out there that do not live up to the expectations. It takes decades.
Which car company is currently most competitive with Cadillac—
BMW.
—and where do you want that to be?
BMW is definitely our biggest competitor, not the least because we build the cars that BMW no longer builds: performance-oriented cars that are nimble and fun to drive. Yet, their brand is so strong that there is no denying that they are kind of the benchmark for everybody, and they are number one, volume-wise, in the luxury segment as well. Everybody looks at them and says, "What's BMW doing and how can we learn?" My answer, having worked for BMW for almost 15 years, is not to try to copy the "ultimate driving machine." Build a valued alternative to the "ultimate driving machine." I think BMW didn't become successful because they copied Mercedes; they built an alternative to a Mercedes. Cadillac will only gain strength versus its German arch rivals if we give people a reason why they should buy a Cadillac, and deliver something that the Germans do not have. I really think that the distinctive styling that we have—whereas they are more mainstream—the Americana and American heritage, and the optimism that Cadillac displays, are great differentiators. There will be more and more people out there who say, "They build perfect cars, but do I want a car that half the neighborhood is already driving?"
Soon enough, there's going to be a shift in Art & Science. What will be crucial in that marketing effort?
We feel that Art & Science was absolutely right, because it combines the left and right halves of the brain in a very nice way. The Germans are only focused on the science side, and they are very performance, technology, and engineering-driven. We say, "Ha!" We are not about technology. We are about ingenuity. This is the arts part. That's why I think that reviving this idea that we are as appealing to emotional buyers that simply say, "I couldn't care less about the technical details behind this lovely ELR, but I simply like it and want to have it," is right for us. In terms of the design language, we embarked on a new journey with ATS and CTS. It extended with CT6, but then we have a proper lineup of sedans that have enough similarity to be unmistakably Cadillac, but enough differentiation between them. The question is how we evolve the design language into something that keeps both elements, art and science, alive. This is something that we're currently discussing with engineers. How bulky? How massive? Should they be slimmer? What degree of polarization do we still allow? To what degree do we conform to the premium standards? My hope is that we still allow Cadillac to be bolder, louder, more optimistic, and slightly more unapologetic in our designs. I have no issues if someone says that [they] do not like the designs, as long as there are enough people out there saying that they love it.
Will you sell CT6 alongside CTS?
Yes.
Will that be confusing?
Not at all. You mean nomenclature-wise? There's no denying it: ATS, CTS, CT6, that's slightly confusing. If you see the car, the confusion is over. We shouldn't discuss nameplates and nomenclature in isolation from the cars. If you see the CT6, it's so much bigger than the CTS—although in weight terms, it's about the same—people will understand the car. There's no denying that we'll have a couple of years where we'll muddle through with two different nomenclatures simultaneously. The only alternative to that would have been changing overnight. I'm not so sure I'd want the Infiniti example, because it's also a little confusing to do that overnight. I think that our approach is a mess for a couple of years, and doesn't have consistency, but once all the cars have the new nomenclature, we'll have a very clear lineup to give the cars mental spaces so customers know where they sit, size-wise and pricewise. That's all I want. Cadillac has to be the driver of passion, not "CT6."
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