Cadillac CEO Johan de Nysschen has abruptly left the company, having led it since 2014
The automotive world is changing. Much with several other industries, its becoming more and more about speed. Faster product styles, fresher products and, indeed, faster turnarounds. After emerging from bankruptcy in 2009, Cadillac had largely recovered its sales by late 2014, when Johan de Nysschen took over as CEO. In a bold move, the company moved its headquarters to New York. The goal was to separate the brand from the rest of GM – a daring endeavor that aimed to turn the luxury market on its head and declare to the world that Cadillac could step toe-to-toe with the European elite. To that end, Cadillac, with de Nysschen at the helm, launched Project Pinnacle to overhaul revitalize the brand in the minds of the car-buying public.
Going by the numbers, that move has shown mixed results. On the whole, Cadillac sales were down roughly 11% from 2015 levels. However, as de Nysschen focused on repositioning the brand and appealing to younger buyers, customer satisfaction did increase. That doesn’t necessarily help Cadillac’s current sales slump, though. As the wholesale turnaround hasn’t gone as quickly as GM had hoped, de Nysschen has now left the building. According to recent reports, his future-focused approach that aimed more at building the brand than capitalizing on current sales trends and pushing harder with current models. In an interview with Bloomberg, de Nysschen stated he parted with the company amicably. “We agree to disagree, and move on,” de Nysschen said, referring to his differences with GM executives.
All about speed, speed, speed?
The former CEO’s sudden departure from Cadillac comes amid a mixed bag of results from his short tenure. On the one hand, he has built brand recognition and reputation. On the other, however, sales have been slumping in the U.S. The numbers don’t lie: sales have dropped in the past two years. Crossovers are a red hot segment right now, and Cadillac has two issues. One is the fact that they only have three crossovers: the XT5, the soon-coming XT4, and the Escalade. While the Escalade is Cadillac’s cash cow, the XT5 hasn’t moved the needle much since it replaced the dated SRX model. The other problem is their current sedan platforms are getting long in the tooth compared to their luxury rivals.
Manufacturers are moving to accelerate their production strategies, with those like Ford planning to reduce its “average showroom age” to 3.3 years. That means either replacements or brand new models will appear every 3 years. While Cadillac’s crossovers are fairly new – the XT5 emerged in 2016 and the XT4 is coming, its sedans are no spring chickens, with the exception of the CT6. The entry-level ATS emerged in 2012, while the current-generation CTS came a year later.
In a recent statement, GM president Dan Ammann said:
“Looking forward, the world is changing rapidly, and, beginning with the launch of the new XT4, it is paramount that we capitalize immediately on the opportunities that arise from this rate of change. This move will further accelerate our efforts in that regard.”
Sales for other luxury brands have increased in recent years. De Nysschen, who held positions at Audi and Infiniti, did not immediately capitalize on the opportunities here and now. Namely, focusing on marketing and sales of cars – especially crossovers – rather than the long-term future of the brand. He also strategized to increase the brand’s residual value by shying away from incentives, which hurt sales volume. Recent incentives have kicked sales up through the first quarter of this year.
GM Canada Head Takes Over
Steve Carlisle, president and managing director of GM Canada, will take the reins as Cadillac’s CEO. Carlisle started with GM in 1982 as an engineering student, and has since held several positions throughout the company. A big question remains in whether Project Pinnacle, spearheaded by de Nysschen, will be affected by his departure. Will Carlisle focus the companies efforts more on SUVs? Time will tell if speed becomes the name of the game under Cadillac’s new president.
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