Cadillac’s Comeback: Reviving American Luxury Cars

WARREN, Mich. — Entering the global design headquarters of General Motors feels like stepping into a time capsule. The midcentury-modern architecture has largely remained unchanged since its inauguration in the 1950s.

This expansive tech campus was established during GM’s heyday, a time often referred to as the company’s “Golden Era.” During this period, Cadillac, the luxury division of GM, was touted as “the standard of the world,” a title that has since faded due to a decline in U.S. market shares facing fierce competition from brands like BMW, Mercedes-Benz, and Lexus.

Although GM President Mark Reuss did not experience this era firsthand, he has drawn inspiration from it while leading a revitalization effort for Cadillac, aiming to restore its status as a premier American luxury brand.

“There aren’t many American luxury brands left. It’s time for GM and Cadillac to showcase our capabilities,” Reuss stated in an interview with Finance Newso from his office overlooking the lobby.

Historically, Cadillac has competed domestically with Ford Motor‘s Lincoln, which maintains a foothold selling about one-third of the vehicles Cadillac does in the U.S. Additionally, the market is increasingly saturated with luxury offerings from German, Japanese, and more recently, South Korean manufacturers, alongside electric vehicle innovators like Tesla and Lucid Group.

The luxury vehicle segment is pivotal for automakers due to its superior profit margins and appeal to affluent consumers who view these cars as symbols of status, not merely transportation.

Reuss’ role encompasses oversight of all GM’s brands and products, with a particular focus on Cadillac, which has gone through four different leaderships since 2015.

Those close to Cadillac describe Reuss as a guardian and a visionary voice for the brand.

Though there have been setbacks — including challenges in sales in China and issues related to electric vehicle production and adoption — Cadillac has largely stayed committed to a decade-old strategy aimed at boosting the luxury brand’s presence. Accomplishing this within a massive automaker like GM, characterized by regulatory challenges and budget constraints, is no small feat.

“If you had seen Cadillac’s financials and portfolio, it was not performing well,” Reuss acknowledged. “Transforming a brand that has been around for 150 years from a state of disarray is a lengthy endeavor. Cadillac still isn’t ‘the standard of the world,’ but we have a clear vision moving forward.”

This vision relies heavily on all-electric models, sporty sedans, and the Escalade, Cadillac’s flagship vehicle and one of GM’s most recognized nameplates, to reclaim its former prestige.

Executives at Cadillac liken this journey to a race with no definite end.

In the summer of 2018, Reuss, GM design chief Michael Simcoe, and then-Cadillac chief Steve Carlisle, among others, outlined a vision for the brand during a major release at GM’s iconic design dome. This assessment was a reevaluation of Cadillac’s strategy initially introduced in 2015.

The overarching goal was to segregate Cadillac’s offerings from GM’s other brands, limiting the sharing of consumer-focused components. While sharing some structural elements and powertrains was permitted, interiors and even certain engines would be exclusive to Cadillac.

“We aimed to establish foundational principles outlining what the brand should represent, as our approach had previously lacked consistency,” Carlisle reflected during a phone conversation. “Many have attempted this, and most have not succeeded.”

The intention was to reevaluate Cadillac’s lineup with sleek, dynamic vehicles that would elevate its standing and consequently enhance the residual values of its cars. The brand also aimed to minimize discounts.

At that time, Reuss characterized this as Cadillac’s “one chance,” vowing that GM would “hold nothing back.”

Cadillac has managed to align itself with most of these goals, according to analysts and industry metrics.

“Currently, I believe they are in a very favorable position,” stated Stephanie Brinley, principal automotive analyst at S&P Global Mobility. “They have maintained a consistent approach to the Cadillac brand, which is crucial—consistency over time is vital.”

In an effort to keep pace with competitors like Tesla, Cadillac decided to pivot towards producing all-electric vehicles, initially planning gas-powered models to phase out by 2030. However, the brand will now offer a complete lineup of both EVs and traditional vehicles.

The first product under the revamped strategy was the all-electric Lyriq, launched in 2022. Meanwhile, the flagship product is the bespoke, $300,000 Celestiq, which is currently undergoing a “relaunch.”

The presentation in 2018 at the design dome was pivotal in garnering support for Cadillac’s current direction, according to Simcoe and others involved.

“The domed setting defined the vision for the Celestiq, focusing on Cadillac’s requirements,” Simcoe discussed from his design office overlooking the dome. “It encompassed everything necessary to define the brand, including our target audience and the portfolio strategy.”

This presentation occurred following the departure of Cadillac’s last president, Johan de Nysschen, who emphasized the need for Cadillac to possess unique vehicle platforms and powertrains.

De Nysschen, who previously led Audi and Infiniti, expressed satisfaction with Cadillac’s progress since his exit. “In broad strokes, they have adhered to the strategic vision that was agreed upon with GM’s executive team,” he commented during a phone interview.

GM’s historic strategy has revolved around prioritizing “volume over value,” focusing on achieving scale for mainstream vehicles before developing luxury options like Cadillacs.

This approach has bolstered GM’s overall profitability, yet it has posed challenges for Cadillac, leading to delays in vehicle segment entries and resulting in products like the short-lived Cadillac ELR and the recently discontinued XT6 crossover.

Cadillac has since realigned its focus, according to company officials.

For instance, there were once discussions about creating a Cadillac version of the mid-engine Corvette, but Reuss indicated that such a move would not align with the brand’s new strategy, as it would have shared many components with the Corvette.

“It was intentionally designed as a complementary vehicle to the Corvette. We would never pursue that direction,” he stated, suggesting potential opportunities for additional specialty vehicles exclusive to Cadillac beyond the $300,000-plus Celestiq.

The all-electric Celestiq is a custom vehicle that GM manufactures on-site at its tech and design campus in Warren. Although it was always intended to be a low-volume production model, initial orders by the end of last year were quite limited.

Following earlier delays in production and sales, Reuss confirmed that GM is relaunching the model now that its software has been significantly improved—a key aspect of the business.

“To be transparent, we faced challenges with our regular EV launches, so we focused on enhancing our software capabilities to ensure successful execution,” Reuss explained. “We didn’t want to release the vehicle until everything was perfect on the software side. Hence, we’re effectively relaunching the car.”

Deliveries to customers are anticipated to commence by mid-year, although the company has not disclosed the current number of orders for the Celestiq.

Success in this endeavor could lead to a new business model for GM, consisting of one segment dedicated to hand-crafted, high-end vehicles and another focused on mass production.

Cadillac has begun regaining attention from Wall Street as other growth avenues have faltered within GM.

“Cadillac is one of the true jewels that we believe deserves more acknowledgment, and significant opportunities exist,” remarked BofA analyst John Murphy at an investor conference alongside Cadillac’s current leader, John Roth.

The decade-long plan for Cadillac is gaining traction, particularly in North America, the brand’s primary market.

In the first quarter of this year, Cadillac noted an 18% rise in sales, marking its best retail performance since 2008, Roth shared. This improvement was achieved while offering some of the lowest incentives in relation to historical average selling prices of around $77,900.

“This is enhancing the health and value of our brand,” Roth stated at the BofA conference. “Cadillac is on a growth trajectory.”

April sales marked Cadillac’s best performance for that month since 2007, GM CEO Mary Barra remarked during a recent call. She emphasized that all U.S.-made vehicles are produced domestically, giving Cadillac a competitive edge over European luxury brands.

“There’s substantial potential for us to build on our product strengths and the fact that our vehicles are American-made,” Barra noted.

While Reuss refrained from commenting on how potential tariffs may affect Cadillac, he expressed confidence that the brand is well-positioned for growth.

As Cadillac flourishes domestically, its sales in China — once its largest market — have been declining sharply. This trend reflects a broader industry challenge as local brands in China increasingly outperform Western models like Cadillac and BMW.

“The market dynamics in China are challenging for everyone, and how Cadillac navigates this isn’t entirely within their control,” Brinley explained. “While their product lineup is solid, current trends are unfavorable for imported brands.”

Cadillac’s sales in China peaked at nearly 232,000 units in 2021, accounting for 62% of its worldwide sales. By 2024, those figures dropped to approximately 110,400 units, representing just 38% of GM’s global sales for Cadillac — marking its first time falling below 300,000 units since 2015.

Reuss affirmed that China remains a critical focus for GM, which is also aiming to establish a re-entry into the European market after selling its operations there in 2017.

While Reuss did not disclose specific sales targets for Cadillac, he insisted that both the Chinese and European markets are essential to the brand’s evolution.