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Luxury car brands scrambling to avoid a blue Christmas

DETROIT — When financial markets surge to new records, sales of luxury cars usually rise, too. Instead, October U.S. auto sales reports on Wednesday showed that a collapse in sales of luxury sedans is accelerating. Consumers have gradually shifted over to luxury sport utility vehicles from sedans in the past decade, but the trend — which has occurred in both the non-luxury and luxury sedan segments of the auto market — was particularly pronounced in October. Sales of Daimler AG's Mercedes-Benz S-Class, long a global benchmark for large, premium sedans, plunged 49 percent in October, and are down 24.8 percent for the year to date. General Motors' Cadillac brand said it sold just 779 of its CTS sedans in October. Demand for that car, designed to compete with German luxury sedans, is down nearly 33 percent for the year. "There's still a significant portion of the market that wants a car, but I'm sure there were people who preferred a horse to a car at one point." Cadillac's best-selling model this year is the XT5 compact SUV, which has more than doubled sales from a year ago. The shift within the luxury vehicle market away from sedans toward SUVs of all sizes is forcing some of the most prestigious brands to scramble to add SUV models to their lineups or boost SUV production to meet demand. "In the short term, there will be pressure to add (consumer) incentives, cut production or both," said Cox Automotive analyst Michelle Krebs. "And we just don't see an end in sight to this trend." The Dow Jones Industrial Average has been trading at all-time highs, usually a good sign for luxury sedans, but as major automakers reported new U.S. vehicle sales for October on Wednesday, sales for passenger cars continued their slide while luxury SUV and crossover sales rose again. According to Kelley Blue Book data, in 2007 luxury sedans made up 7.6 percent of U.S. new vehicle sales, while luxury SUVs made up 4.2 percent. Through September this year, luxury SUVs made up just over 7 percent of the market, compared with 4.9 percent for luxury sedans. In the short term, luxury brands could use holiday season sales promotions to clear slow-selling sedans off dealer lots, analysts said. Toyota's Lexus brand said on Wednesday it will launch its "December to Remember" year-end sales promotion for the 18th straight year.

Cadillac Oscars ad shows none of its cars or trucks

Can you sell something without actually showing the product in an ad? While this sounds like a question that Don Draper might have, Cadillac apparently thinks it's possible with at least one of the brand's three upcoming Oscars commercial. Days after whiting-out the company's social media presence in preparation for the new campaign, some of the advertising is finally here. Titled Dare Greatly, the first released spot goes for a stripped down, minimalist aesthetic. The entire piece is made up of voiceover and ambient noise set over slow-motion driving shots of New York City. Viewers catch a few out-of-focus glances at a Cadillac interior, but otherwise the only vehicles in the commercial are the ones parked along the street. The speech that is the centerpiece of the ad is all about the glory in just making an attempt, rather than criticizing others. "There is no effort without error and shortcoming," it says at one point. According to The Detroit Free Press, the text comes from a lecture by Teddy Roosevelt in 1910 at the Sorbonne in Paris. Cadillac's commercial never actually attributes the words to the former president, but the company is playing up the connection on social media. The full 1:30 version of the spot is already streaming online, but Cadillac is cutting the commercial into 30-second and 60-second versions to air during the Oscars, according to The Detroit Free Press. Of the brand's two other ads during the awards show, at least one of them shows the company's vehicles.

GM Cadillac chief: New CT5 will replace 3 sedans; EVs coming

DETROIT - The head of General Motors' Cadillac luxury division said on Thursday the brand will shrink its lineup of sedans and expand its offerings of sport utility vehicles and hybrid and electric vehicles in response to market shifts. Expanding Cadillac's global sales is central to GM's overall profit strategy, and Cadillac has reported a 27 percent increase in worldwide sales through the first half of the year. However, in the United States, now the brand's second largest market behind China, Cadillac sales are down 1.6 percent and combined sales of the brand's four sedan models have plummeted 16.3 percent through the first half of the year. That has forced GM to order layoffs at two Michigan factories that build Cadillac cars, and raised questions about the long term future of the plants. "We have to rebalance our sedan portfolio," Johan de Nysschen told Reuters in interview, offering new details about the strategy. Cadillac will not directly replace the current XTS, CTS or ATS sedans when they end their life cycles in 2019, he said. Instead, Cadillac will use a single new car called the CT5 to appeal to consumers shopping for sedans priced between $35,000 and $45,000. New versions of the CT6 sedan will be offered to customers who want a larger car starting at $50,000. Sources had told Reuters last week that GM was considering ending production on six cars including the CT6 and XTS and models from Chevrolet and Buick. That report now appears only half-right as far as Cadillac is concerned. The new CT5 will be built at a factory near Lansing, Michigan, that currently builds the slow-selling Cadillac ATS and CTS models. A small luxury sedan to compete with the Audi A3 will be built in the same plant, de Nysschen said. Cadillac will offer more SUVs, starting with a compact model called XT4, followed by a larger SUV with three rows of seats due by 2019 to compete with vehicles such as Volvo's current XC90 model. Volvo, owned by China's Zhejiang Geely Holding Group, scored a public relations coup by announcing plans earlier this month to power all its vehicles with either hybrid or all-electric technology starting in 2019. The move challenges Tesla, which has eclipsed more established brands with tech savvy luxury buyers. Cadillac has plans "not dissimilar to what Volvo has announced," with more electrified vehicles launching in the second half of the next decade, de Nysschen said.