DAILY EDITION: Jan. 15, 2003

January 14, 2004

TCC'S DAILY EDITION: Jan. 15, 2004

New STS Coming in 2005

2005 Cadillac STS

2005 Cadillac STS

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This is the first official photograph of Cadillac’s 2005 STS. The replacement for the aging Seville sedan is designed to serve as the General Motors brand’s flagship, and that’s why you’ll find the fingerprints of GM “Car Czar” Bob Lutz all over the new car. Lutz pushed back the project a few months in order to soften and add curve to the hard edges originally planned for the ’05 STS — as can be seen in the doors and roof line, though overall, the luxury sedan bears an unmistakable similarity to the razor-sharp CTS. Inside, the car will feature a significantly refined cockpit, the first step in Cadillac’s effort to upgrade its interiors.

The new STS will get its power from either a 3.6-liter V-6 engine or the 4.6-liter Northstar V-8. Rear-wheel drive is standard, while all-wheel drive will be an option. A high-performance V-Series version will follow, perhaps a year to 18 months later, according to Cadillac sources. The new STS will be shown in the “flesh” at April’s New York auto show and will go on sale in the third quarter of this year.

The STS is intended to provide an attainable halo around a brand that has “stopped the slide and gained momentum,” said Cadillac General Manager Mark LaNeve, but there’s plenty of work to do before Caddy can truly reclaim its long-held position as the “standard of the world.” Propelled by a December surge in SUV sales, the automaker recorded volume of 216,090 last year, its best performance since 1990, LaNeve declared during the Automotive News World Congress.

How much more growth is possible? Not as much as some might expect. At its peak, two decades ago, Caddy seemed hell-bent to push sales as far as they could go. That move backfired, causing quality problems and diluting the brand image — and eventually led to a collapse in demand, with Caddy sales slipping behind import rivals like Mercedes-Benz, BMW and Lexus. The goal, according to LaNeve, is to rebuild that sense of exclusivity, even if that means holding sales down to no more than around 240,000 units a year in the U.S.

After a series of setbacks and delays, Cadillac is finally making a serious move on overseas markets. It has a new dealer network set to grow across Europe. And there are serious opportunities in China, which LaNeve noted, is the third largest market for BMW’s big 7-Series.

China could prove an especially good market for the ultra-luxury car now under development. It’s based on the Cadillac Sixteen concept vehicle that proved the big hit of the 2003 North American International Auto Show. A production version likely won’t have the big V-16 shown in that prototype, but insiders hint a V-12 is likely. While there’s no formally approved program, LaNeve is confident a super-lux Caddy will reach market “in some reasonable timeframe after 2007.”

At the other end of the spectrum, Caddy has effectively ruled out a so-called entry-lux model below the CTS. But there could be other products coming. There’s an updated version of the DeVille due next year, for one thing. And Cadillac is looking at the hybrid market, perhaps with a gasoline-electric version of the SRX. As the declared technology leader among the many GM divisions, it would make sense to introduce hybrids and other advanced powertrain systems at Cadillac, according to LaNeve.

Caddy’s general manager acknowledged that the division hasn’t been without its setbacks lately. The launch of the SRX got off to a slow start, he said. Initial emphasis was placed on fully loaded V-8 models priced as high as $60,000. Inventory quickly built up and Caddy had to kick in with incentives. With more V-6 versions priced around $40,000 rolling into showrooms, sales have been picking up sharply. —TCC Team

Cadillac Making Plans for Overseas by Joseph Szczesny (11/17/2003)
New markets and new times at GM’s luxury brand.

Chrysler Fixing Durango, Recalling 2.7 Million Cars

Chrysler Group was set back in its quest to improve its image for quality on Tuesday when it ordered its dealers to stop selling its redesigned Dodge Durango SUV because of a defect that could cause the vehicle to crash. The company also was forced to recall 2.7 million other passenger cars. Chrysler must replace the throttle control cable in the Durango because of a water leak that can freeze the cable in cold temperatures, leaving the throttle open and possibly causing a “crash without warning,” according to a the directive put out to dealers. The fix must be done to 21,000 vehicles with 3.7-liter V-6 and 4.7-liter V-8 engines delivered to customers and sitting on dealer lots. The 5.7-liter Hemi version is not affected. Chrysler also announced it must recall the 1995-99 Chrysler Cirrus, Dodge Stratus, Plymouth Breeze, 1996-99 Sebring convertibles and 1993-99 Chrysler 300M, Chrysler Concorde, Chrysler LHS, Dodge Intrepid, and Eagle Vision cars. Recalls happen to every car company, and experts say that well-handled recalls that don’t happen too often can help an automaker’s relationship with customers. Chrysler executives have been vocal, though, about their intent to catch industry leader Toyota in quality within the next four to five years, which puts any big recall under a spotlight. Meanwhile, two Chrysler officials said on background that there is growing worry about how the public will receive the Dodge Magnum wagon launching later this year. “Feedback at the auto shows and dealers hasn’t been great,” said one Chrysler executive this week. “And the Pacifica is teaching us a lot about how much people really want a car that looks more station wagon-like than an SUV.” —Jim Burt

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