GM Investing Additional $175 Million into Cadillac for Next-Generation Sedans
【Summary】 GM announced it is investing an additional $175 million in a Michigan plant to build two of Cadillac's next-generation sedans.
As car sales fall industry wide driven by consumer preference for compact SUVs and compact crossovers, General Motors is looking to refresh its aging Cadillac brand with two new sedans. GM announced it is investing an additional $175 million in a Michigan plant to build two of Cadillac's next-generation sedans.
GM, according to a spokeswoman, has already begun installing new tooling and equipment at the Lansing Grand River Assembly Plant, which currently builds the Cadillac ATS compact and CTS midsize cars and Chevrolet Camaro.
"We expect global luxury sales will continue grow, with Cadillac's global volume and profit expected to double by 2021, and our investments in the U.S. will be a major driver," GM said in a statement.
The new Cadillac sedans are expected to be named the CT5 and CT4 will eventually replace the slow-selling ATS, CTS and XTS large sedan in Cadillac's car lineup.
Production of the CT5 is expected to begin in 2019, followed shortly after by the CT4. The two cars are part of an extensive overhaul of the brand's lineup that will include a new vehicle on average every six months through 2021.
In February, GM reported record sales for its luxury brand, boosted by strong consumer demand for SUVs and crossovers. Cadillac sold 30,583 units during the month, an increase of 42 percent from the same period last year. Consumer demand for the XT5 luxury crossover and the Escalade SUV helped drive February's sales increase.
"February was a strong month for Cadillac, especially for our SUV portfolio where we saw continued growth with the Escalade despite new competition in the U.S. marketplace," said Cadillac President Johan de Nysschen. "We expect this enthusiasm to grow with the addition of the first-ever 2019 Cadillac XT4 premium compact SUV, which will be revealed later this month." The new XT4 will be available this fall.
Although Cadillac's SUV and compact crossover sales remain brisk, sales of Cadillac sedans have dropped significantly since 2013. The Cadillac ATS sedan sold 38,319 units in 2013. By 2017, sales fell to just 13,100, a 66 percent decline. So it might make sense for GM to replace the ATS and CTS with more modern, high-tech offerings.
Cadillac's global sales increased 16 percent to 356,467 vehicles last year and were led by strong demand in China.
The announced investment comes two years after GM invested $211 million to support tooling and equipment and a 32,000-square-foot addition to the body shop for future Cadillac sedans.
GM has spent $464 million in manufacturing for Cadillac vehicles in the past two years. Other major investments have taken place to expand Cadillac Escalade capacity and build the first-ever Cadillac XT4 and XT5 crossovers.
Cadillac was also appointed a new president this year to help revive its sedan sales. In April, after nearly four years leading the luxury brand, Cadillac president Johan de Nysschen left the company and was replaced by Steve Carlisle, president and managing director of GM Canada.
Originally from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry in Silicon Valley. Eric has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology. Outside of work, Eric likes to travel to new places, play guitar, and explore the outdoors.
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