Cadillac will operate as a separate business unit from General Motors and report its own financial results within a few years, brand chief Johan de Nysschen said today.
Speaking to Wall Street analysts during a conference in New York, de Nysschen said that by then, Cadillac will have "a far higher degree of autonomy and self sufficiency" by 2017, which will allow it to break out its own profit-and-loss statements.
"For now, you'll have to accept my assurances that Cadillac at this state makes a very sizeable contribution to the overall profit at General Motors," de Nysschen said during a presentation at the J.P. Morgan Auto Conference.
Since taking over a year ago, the former Audi and Infiniti chief has emphasized autonomy for Cadillac from its corporate parent. In recent months the brand's executives and much of its marketing and sales functions have relocated to a new headquarters in New York's SoHo neighborhood.
One "very profound focus" for Cadillac is to distinguish its dealer network from the rest of GM's sales and marketing channel, de Nysschen said. For example, Cadillac executives are discussing a major revision to its dealer-incentive program to focus more on brand-building and less on sales performance.
"If you aren't strengthening the brand perception, you should have less reward," de Nysschen said.
De Nysschen cited his previously stated goal of selling 500,000 Cadillacs globally by 2020, which should equate to about 5 percent of global luxury automotive market. Last year the brand sold 263,697 vehicles, good for about 3.4 percent of global luxury market share.
For now, Cadillac suffers both from an image problem as well as a "very narrow product portfolio," de Nysschen said. He reiterated that Cadillac plans a "massive product offensive," including several new crossovers.
But he also acknowledged that there will be a significant pause in fresh product following the launch of a successor to the SRX midsize crossover. The new offerings won't arrive until early 2018 or later.
"We're in the investment phase," he said. "We are preparing for the future."
In the meantime, Cadillac will work to improve the customer experience at its dealerships. It also will try to attract more younger people by marketing the brand as a more contemporary luxury marque. He said the "Dare Greatly" advertising campaign launched in February has been "resonating really strongly" with millennials.
De Nysschen urged analysts to consider the context of Cadillac's 7.1 percent in U.S. sales through July even as U.S. luxury sales rose 8.7 percent during that time. He said incentives are down and average transaction prices are up across the vehicle portfolio.
The results, he said, reflect "a shift in focus to quality before quantity."
