DETROIT -- About seven weeks into his job as the global head of Cadillac, Johan de Nysschen can’t help but be reminded of another luxury auto brand: Audi -- 10 years ago.
Like Audi circa 2004, Cadillac has expanded and improved its lineup — it confirmed just last week that it will enter “the elite class of top-level luxury cars” with a new rear-wheel-drive sedan coming next year — but it’s struggling to overcome a faded brand image. And Cadillac wants to stand apart from the General Motors mothership, even though it lacks the scale to compete head-on with the likes of BMW and Mercedes-Benz.
De Nysschen, 54, was the principal architect of an Audi transformation now considered the case study for successfully building a global luxury brand. He’s prepared to dedicate the 10 or 15 years that he estimates it will take to make Cadillac “the pinnacle of aspirational brands.”
“The playbook is very similar,” he told Automotive News last week.
De Nysschen, who came to Cadillac from Infiniti in August, says his first priority is getting Cadillac not only to develop vehicles to top its German competitors but to think like the Germans, too.
Inside GM, he worries, it’s too easy for people to get distracted by the needs of its various brands. That wouldn’t fly at BMW, Mercedes-Benz or Audi, de Nysschen says, which are focused solely on the luxury space and “plan for our demise every working day.”
“Securing 100 percent mind share and dedication on the needs of the premium business is going to be an important change to the status quo,” he says. “Cadillac will begin to develop its own identity, its own corporate culture.”
That shift perhaps can be seen best in de Nysschen’s resolve to price Cadillac’s vehicles on a par with those from BMW and Mercedes. He says he’s willing to forgo loyal customers who might have sticker shock over Cadillac’s sharply higher prices and is content to “charge a fair price for the car” and “wait until the volume comes.”
It’s a posture that’s likely to disappoint volume-hungry dealers accustomed to GM’s move-the-metal sales mentality. It’s also right out of de Nysschen’s Audi playbook.
Russ Hill, who was head of sales for Audi in North America when de Nysschen arrived to run Audi of America in 2004, says de Nysschen was able to “create a vision of a premium brand” that instilled confidence in Audi staffers and dealers.
“He had conviction that Audi was in a position to raise both price and volume,” Hill says. “It was an iconoclastic position. But it was the right one, and it worked.”
De Nysschen points to Cadillac’s powertrain lineup as a reason why the brand needs its space. Its engine choices partly have been dictated by the broader needs of GM’s volume brands. “You might have to wait until 2019 to get that engine you need right now,” he says.
There have been wins, including the 3.6-liter twin-turbo V-6 that Cadillac introduced last year in CTS and XTS sedan Vsport models. But signs of brand-sharing abound across the rest of Cadillac’s lineup. The 2.5-liter, four-cylinder base engine in the ATS is a version of the motor used in the Chevrolet Malibu. Versions of the 3.6-liter V-6 in the ATS and CTS sedans can be found under the hoods of multiple Chevys, Buicks and GMCs.
“Cadillac moving toward primarily its own, exclusive engines is a brand builder that they’ll need to compete with the German brands,” says Warren Browne, a Detroit-area automotive consultant and former GM executive.
Still, de Nysschen isn’t calling for a return to the days at GM when powerful brand chiefs essentially ran separate car companies, each with an engineering division and factories.
Instead, he wants to strengthen Cadillac’s clout within the product-development enterprise. He says Cadillac’s chief engineer, Dave Leone, will work more closely with the brand’s executive team and oversee Cadillac-focused engineers inside product development, to “plug into the corporate resources” and draw on high-level expertise in specific areas. “That way, you’ve always got people who are wearing the Cadillac hat and setting the agenda,” de Nysschen says.
Cadillac took a step toward greater autonomy in 2012 when former GM CEO Dan Akerson appointed Bob Ferguson to a new post as Cadillac’s global chief. But Cadillac’s sales and marketing functions remained largely under the influence of GM’s North America division.
De Nysschen’s quest for Cadillac autonomy has the advantage of being backed by a new executive team that is eager to break with old GM habits. GM President Dan Ammann, de Nysschen’s boss, shares the vision of an autonomous luxury brand and has given his new hire broad authority and profit-and-loss responsibility.
One factor that has prevented Cadillac from acting like a stand-alone car company is its lack of scale relative to global competitors.
De Nysschen has an answer to that: China. He plans to continue Cadillac’s rapid sales growth in China and says he’ll plow the profits back into product development for the U.S. and beyond. GM forecasts that Cadillac’s China sales will hit 100,000 next year, up from about 30,000 in 2012.
De Nysschen says: “Globalization is what will give us the economies of scale.”