General Motors Co.’s (NYSE: GM) Cadillac has a single burning problem. Its model line is not nearly as large as that of luxury car leaders BMW and Mercedes. It set a program that could partially offset that, if it can be rolled out nationwide, and perhaps offered at a lower price point. The “BOOK by Cadillac” plan could buy the brand a great deal of time as it fills in its lineup with more sport utility vehicles and crossovers.
Cadillac already has begun to add models that broaden its appeal. Among these are the XT5 crossover and CT6 sedan. In particular, the XT5 should be competitive at the low end of the luxury crossover segment. Its base price is $39,395. However, it will take year to match the selections from BMW and Mercedes
BOOK by Cadillac allows luxury car buyers in the New York City area a chance to participate in a “vehicle subscription” program. People who enlist in the program can swap between Cadillac models as they set fit. The program does not include all of Cadillac’s models, but has enough for drivers to sample cars across the SUV, crossover, sedan and sports cars of the brand.
The GM luxury brand’s description of the BOOK by Cadillac program:
A flat monthly fee of $1,500 eliminates the hassles of car ownership so members can experience uninhibited driving. Membership is month-to-month with no long-term commitment required. Members can use a mobile app to reserve vehicles that will be delivered to their specified locations via a white-glove concierge service. Certain location restrictions apply. Members will have access to the current year Platinum Level Trim Cadillacs, including the XT5, CT6, Escalade and V Series. Registration, taxes, insurance and maintenance costs are included in the monthly rate and there is no limit on mileage.
People can swap based on their desire to sample several models, or for reasons that include customer needs based on things like the weather.
For the program to be really effective, it would need to be rolled out in major cities. And the Cadillac brand may not carry the $1,500 price point. Car leases for almost all Cadillacs are well below the $1,500 level. The insurance program would benefit young drivers, who usually pay more for insurance, than the typical Cadillac driver, who is older. And most customers will have some level of insurance of their own.
Great program, but needs modification.