Cadillac can barely sell any cars, compared to its three Germany competitors and the luxury divisions of Japanese companies. However, General Motors Co. (NYSE: GM) brand can point to a high level of quality as a means to draw buyers.
Source: courtesy of General Motors Co.
According to the new J.D. Power 2015 Vehicle Dependability Study, Cadillac ranked fourth among all nameplates in problems per hundred cars at 114. Lexus, the luxury arm of Toyota Motor Corp. (NYSE: TM), beat it at 89, which put it at the top of the list. However, other luxury brands fell well behind. This includes Porsche at 116. The sports car brand has tiny sales in the United States. Mercedes had 119 problems. Audi had 138. BMW posted a mediocre rate at 146, against an industry average of 147.
The quality mark is cold comfort for Cadillac’s management and its long-suffering dealers. In January, luxury maker leader Mercedes sold 26,124 vehicles, which was a 9.3% increase from January 2014. BMW’s sales were 18,971, up 4%. Fast-growing Audi, a division of Volkswagen, sold 11,541, up 14.3%.
Cadillac’s sales rose only 2.6% last month to 11,680. Without the sales of its beast of a sport utility vehicle (SUV), the Escalade, Cadillac’s sales growth rate would have been awful. Sales of the Escalade were 1,664 in January, compared to 704 last year. Sales of the Escalade ESV hit 1,100, up from 381. The Escalade is a very expensive vehicle, so presumably it builds high profits. The base model sells for $73,000. With a full set of features, the SUV’s price is just short of $100,000.
The improvements could not hide the disintegration of sales of Cadillac’s SRX, down 21% to 3,485.
In theory, the J.D. Power rating should be an important marketing opportunity for Cadillac, but it may not help the brand much. Among Cadillac’s weaknesses are its limited product line and slow rate of introduction of new models. In this area, Cadillac runs so far behind that it may be nearly impossible to catch Mercedes and BMW. The GM luxury division has a grim future.
ALSO READ: Chrysler Flunks Dependability Study
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