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Cadillac wants to take back luxury

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Luxury. Aspiration. Cool. For years, those were words that could easily be applied to Cadillac, perhaps the most iconic brand of American cars this side of the Mustang.

For the past decade or so, though, Cadillac has not kept up with the times. It hasn’t been the brand young people aspire to own, but instead was seen as a stodgy, old nameplate — one whose day had come and gone and made millennials think about the cars their parents drove in the 1980s, not the cars they wanted to buy once they finally started to earn the money needed to buy anything more than a broken down beater.

Now, though, the New York — by way of Detroit — company is looking to change all that. Cadillac wants to take back some of the luxury consumers it has ceded to the German carmakers — namely BMW and Mercedes — and reestablish itself as, pardon the expression, the Cadillac of cars.

Johan de Nysschen, Cadillac’s president, says the automaker’s strategy is built around producing the type of car Cadillac drivers have never seen before. A car driven not only by advances in traditional automotive technology, but also by utilizing the connectivity that General Motors’ (GM) CEO Mary Barra said earlier this month would be at the forefront for all GM brands, including Cadillac.

At the global investors conference held earlier this month, Mark Reuss, GM’s executive vice president of global product development, said that an upcoming Cadillac model would “be the most advanced vehicle technologically in the world.” This car will be called the CT6, and will hit the pavement in late 2015. Details on the car haven’t yet been released, and Cadillac is keeping tight-lipped on its features, but analysts are expecting a wonder.

“You’ve got to have a vehicle that has a ton of power on tap, that delivers smoothly,” said Kelly Blue Book analyst Alec Gutierrez. “It has got to be quiet inside; it’s got to have top tier Nappa leather.”

Gutierrez also stressed the importance of the technology side of the car, saying he expects that the Ct6 will have the “next generation” of Cadillac Cue, the carmakers infotainment system. Streamlining is important, he said, and it has to be easy for drivers to sync their smartphones to the car and access their apps and content.

But even if Cadillac does create the best cars on the market, they are still battling back against a very difficult brand perception problem. De Nysschen knows that such a change won’t happen overnight, and admits that it’s a “valid perception” that millennials simply aren’t interested in driving Cadillacs. He knows what he and his team have to work “more aggressively on defining exactly what the Cadillac brand stands for.” The recent move of the company to New York, where it will enjoy a greater degree of autonomy from its parent company GM, will help. De Nysschen is honest in saying that in a company where two brands, one low-volume and one high-volume, coexist, the needs of the low-volume brand, in this case Cadillac, often are pushed aside for the needs of the higher-volume brands, such as the Chevrolet and other cheaper cars produced by GM.

Another important part of the change to Cadillac’s culture is a change the way the automaker sells cars. De Nysschen wants to create a sales map that is a combination of classic big showroom dealerships and smaller, “Tesla-style” stores with a showroom that might only have one or two cars, but would be “very upscale, very sophisticated.” In the future, he also wants to use a virtual showroom that would really show off the technology Cadillac has to offer, something he understands is “particularly relevant to millennials.” Also, though it’s currently not possible, de Nysschen wants to be able to take the product to where the consumer is: “We will bring the cars to the workplace, or to their home to experience and to test drive,” he said.

Of course, the luxury vehicle market is broader than you might expect. There are the super luxury cars, of course, which are very expensive and generally only available to the very wealthy. Then there’s the lower end of the segment — cars that appeal to the aspirational segment (people who have achieved some success, but perhaps want a brand that is a bit beyond their social stratum at the moment). For that class of shopper, Cadillac will eventually look at introducing model with a lower price point; an entry-level model below the current Cadillac ATS. For that car to be viable, though, Cadillac first has to reestablish itself in the upper stratum of the market, de Nysschen said. For this reason, the lower market product wouldn’t be introduced until closer to the end of the current cycle, sometime around 2020.

“We will go upmarket before we go downmarket,” he said.