Alpha dud

[akirby]

I forgot about MKT. So Lincoln has had 4 utilities for the last 3 years and it will take another 2 years for Caddy to add 2 more to match them. Sounds about right.

 

Where would Caddy be today if they had come out with XT6 and XT4 instead of ATS and CTS and instead just updated the old CTS?

[akirby]

ATS and CTS were in showrooms when he got to Caddy with CT6 in mule stage, can't blame him for Detroit's own miscalculations. CT5, CT4 and'19 CT6 would be full JDN cars.

 

Didn't he greenlight a super sedan above CT6 after the rest of the industry acknowledged the growth in utilities and decline in full sized sedans?

 

Utilities aren't nearly as sexy as cars but they sure pay the bills.

[rperez817]

 

Utilities aren't nearly as sexy as cars but they sure pay the bills.

 

Yes sir, that's why Johan's two part strategy makes sense. Part 1, develop excellent cars that compete well with European and Asian brands to make the Cadillac brand world class. Part 2, add utilities to the Cadillac lineup to increase sales and pay the bills.

[fuzzymoomoo]

The problem is they compete on paper, but they just aren't resonating with the public.

[akirby]

 

Yes sir, that's why Johan's two part strategy makes sense. Part 1, develop excellent cars that compete well with European and Asian brands to make the Cadillac brand world class. Part 2, add utilities to the Cadillac lineup to increase sales and pay the bills.

 

No, it doesn't make cents (see what I did there?).

 

You make the stuff that pays the bills first, then you use the profits to make what you want to make. You can make world class utilities the same as world class cars.

[rmc523]

 

Yes sir, that's why Johan's two part strategy makes sense. Part 1, develop excellent cars that compete well with European and Asian brands to make the Cadillac brand world class. Part 2, add utilities to the Cadillac lineup to increase sales and pay the bills.

 

So....

 

Part 1) Lose lots of money, hemorrhage sales

Part 2) Add stuff that will add some sales back, and hope to make enough to pay for what you lost in part 1?

[rperez817]

 

So....

 

Part 1) Lose lots of money, hemorrhage sales

Part 2) Add stuff that will add some sales back, and hope to make enough to pay for what you lost in part 1?

 

Part 1 is a prerequisite to Part 2. If Cadillac lacks world class cars, it won't be taken seriously as premium brand for any of its vehicles including crossovers and SUV.

 

I don't think Cadillac loses lots of money on its sedans. Only GM's accountants know for sure though. Johan did away with fire sale incentives for Cadillac. Also like GM as a whole, fleet sales for Cadillac have been reduced a lot compared to 5 years ago. That's good for profitability.

[jpd80]

Should an Chevy Alpha sedan appear it should shock the market by offering a sub $30k low dollar V8 model even if it steps on the toes of the Malibu. I believe the Camaro is going this route next year.

 

As far as the platform it may not be sell in high volumes but I don't think it's a dud considering the circumstances it was intended for in the 1st place.

 

3 Cars already built on this platform and until someone on here knows its balance sheet, can't whine about what it cost to develop. Eventually as time goes on Alpha will get periodical updates addressing it's shortcomings.

You have a whole plant dedicated to Alpha production at Grand River and with sales

the way they are, there's a strong possibility that more workers will be fired and go back to one shift.

 

The frustration here is with poor marketing, not the cars themselves but who they are pitched to

and th degree of exclusive pricing. Ypur hints at a Chevrolet based Alpha is promising but GM

really needs to consider all possibilities and stop hiding these cars away from the wider sales

channels of Chevrolet and Buick...Consolidation of platforms may be coming soon.

 

I remember an article that mentioned relative costs of developing Camaro off Zeta architecture saved about 10% on the cost of a unique architecture which probably explains fords decision of evolving Mustang but also why they didn't bother with four door derivatives.

 

Point being development costs are relative to objectives an expected outcomes, GM spent mor but got more but then sold a lot less than expected.

Edited August 15, 2017 by jpd80

[akirby]

Part 1 is a prerequisite to Part 2. If Cadillac lacks world class cars, it won't be taken seriously as premium brand for any of its vehicles including crossovers and SUV.

 

I don't think Cadillac loses lots of money on its sedans. Only GM's accountants know for sure though. Johan did away with fire sale incentives for Cadillac. Also like GM as a whole, fleet sales for Cadillac have been reduced a lot compared to 5 years ago. That's good for profitability.

As usual you're not seeing the big picture. You're not counting factory overhead, which adds a lot more cost to each vehicle when volumes are low. You're also not counting platform development costs which is at least a billion versus $200M for a new top hat on an existing platform.

 

MKZ and MKX share a platform that sells almost 500K/yr. Compared to Alpha at what, 150K max? And CD4 is a cheaper platform.

 

You don't need to see the books to understand the difference.

[rmc523]

 

Part 1 is a prerequisite to Part 2. If Cadillac lacks world class cars, it won't be taken seriously as premium brand for any of its vehicles including crossovers and SUV.

 

I don't think Cadillac loses lots of money on its sedans. Only GM's accountants know for sure though. Johan did away with fire sale incentives for Cadillac. Also like GM as a whole, fleet sales for Cadillac have been reduced a lot compared to 5 years ago. That's good for profitability.

 

No, it isn't.

 

So you think that a brand can't make premium/luxury crossovers and SUVs without having premium/luxury sedans? Not saying having a great sedan lineup doesn't add to the image, but I don't believe it's a requirement for the SUVs to be successful.

 

As we discuss every time this is brought up - GM spent billions on Alpha and has received nothing but continually declining sales. ATPs may be up, sure, but past a certain point, if you continue to lose sales, ATPs won't make up that difference.

[jpd80]

A different perspective for me rather than straight losses...

GM has and will continue expending billions on Cadillac in North America and China.

A of of that money is spent up front on developing platforms and building or reconfiguring plants.

 

Things like parts supplies, steel sheets, Labor / employes and plant power and water are all variable

cost that can be altered with changing line speed or increasing or reducing the number of shifts.

 

I'm glad that GM is now reviewing Camaro trims and options but it seems to be following the same

similar worn path as ATS and CTS, over commit to excessive production in the first 12 months

followed by strong reductions in production and personnel.

 

Manufacturers like GM and Ford lead with vehicles they believe stand the best chances of success.

Bottom line is if these plans aren't successful, it's an uphill battle to justify the next product cycle and

that's the situation we're in when car sales don't meet expectations - hard questions are being asked..

Edited August 16, 2017 by jpd80

[Fgts]

....platform development costs which is at least a billion versus $200M for a new top hat on an existing platform.

 

MKZ and MKX share a platform that sells almost 500K/yr. Compared to Alpha at what, 150K max? And CD4 is a cheaper platform...

 

 

So when the total replacements for the Fusion and Mustang debut you think it won't cost billions for 2 different drivetrain setups?

[fuzzymoomoo]

So when the total replacements for the Fusion and Mustang debut you think it won't cost billions for 2 different drivetrain setups?

If what we've heard about CD6 is true then yes, it's not going to be cheap. PremierDrum hinted at that a few times.

[rmc523]

If what we've heard about CD6 is true then yes, it's not going to be cheap. PremierDrum hinted at that a few times.

 

BUT, a good point to mention - unlike GM, it should underpin at least 10 models, with another 5 possible depending on what happens with them.

 

Here's a list:

 

Ford:

-Fusion/Mondeo

-Edge

-Explorer

-PIU

-Mustang

 

Lincoln:

-MKZ replacement

-Continental

-MKX

-Aviator

-Lincoln coupe

 

This group accounted for roughly 917,000 units last year (Europe and US numbers only - China's numbers weren't broken down for December last year and doesn't account for Aviator and Lincoln coupe volume, obviously)

 

Questionable:

-Taurus (if it survives, possibly remains China-only), or a 4-door premium "Thunderbird" as we've discussed here

-PI (tied to fate of Taurus)

-Lincoln "Large sedan" (which was in the product plan a while back)

-S-Max (does this MPV type vehicle survive with crossover popularity/is it replaced by Edge?)

-Galaxy (does this MPV type vehicle survive with crossover popularity/is it replaced by Edge 7-passenger model, or even Explorer?)

 

These models accounted for another roughly 104,500 units last year, not including China volume

 

---

 

So that's over a million units that would be on this platform (well, variations of it).

Edited August 16, 2017 by rmc523

[akirby]

 

BUT, a good point to mention - unlike GM, it should underpin at least 10 models, with another 5 possible depending on what happens with them.

 

Here's a list:

 

Ford:

-Fusion/Mondeo

-Edge

-Explorer

-PIU

-Mustang

 

Lincoln:

-MKZ replacement

-Continental

-MKX

-Aviator

-Lincoln coupe

 

This group accounted for roughly 917,000 units last year (Europe and US numbers only - China's numbers weren't broken down for December last year and doesn't account for Aviator and Lincoln coupe volume, obviously)

 

 

This ^^^^^. 1M units annually versus 100K between ATS/CTS and Camaro. It shouldn't be hard to understand the economic differences.

[Fgts]

 

 

This ^^^^^. 1M units annually versus 100K between ATS/CTS and Camaro. It shouldn't be hard to understand the economic differences.

So that means GM should scrap Alpha (which been paid for from the BK) and spend another billion to prove they can save money?.

 

I get what you're saying (several vehicles + 1 platform = savings) but I don't think a call to cast away a good platform without seeing improvements to it first.

Edited August 16, 2017 by Fgts

[akirby]

Who said anything about casting away the platform? Just pointing out that from a business standpoint it hasn't been remotely successful even with adding Camaro as an afterthought.

 

The problem with ATS/CTS isn't the platform or the performance - it's the styling and cost and room that doesn't jive with Cadillac buyers. They can fix that with new vehicles but none of that negates the poor investment.

 

Why wasn't XT5 built on Alpha? That would have helped a lot.

 

CD6 will have the benefit of multiple vehicles to recover that investment including high volume utilities. It may take longer and not be quite as sexy but it's a much more practical approach to the problem.

[rmc523]

So that means GM should scrap Alpha (which been paid for from the BK) and spend another billion to prove they can save money?.

 

I get what you're saying (several vehicles + 1 platform = savings) but I don't think a call to cast away a good platform without seeing improvements to it first.

 

Well, GM does that regularly (creates platforms, and just replaces them with the next-gen model). He's not saying to scrap Alpha, more that platforms should be thought of with a wider product scope from the beginning to maximize ROI for the program and spread costs out over a wide net of offerings. Case in point - Alpha can't handle a crossover/SUV. Which means either creating another new platform for it, or significantly altering Alpha to handle crossovers. And I doubt they'll be smart and use other existing GM platforms.

 

So Alpha is basically already a dead man walking.