What Are Your Thoughts On Cadillac and BMW?

Over the past few weeks Cadillac has become very bold, and rightfully so, with the unveiling of their new ATS-V Coupe. This has lead to a lot of banter on the Internet, with some going as far to say that BMW should be looking in their rearview mirror because Cadillac is catching up with the German luxury car manufacturer. The BMW faithful are defending their favorite cars, while fans of the new Cadillacs are beginning to believe GM’s luxury branch has finally made a comeback in the luxury car market. What do you think? Is Cadillac inching closer behind BMW, or should the people in Munich just laugh at Cadillac’s show of force?

The BMW product line has certainly been extended the past few years, and with the BMW M4, and the highly anticipated four-door BMW 435i Gran Coupe, it doesn’t look like they’re going to give up ground easily. While Cadillac’s newer designs and breath of fresh air is encouraging, can they compete with a luxury brand that seems to be sticking their nose into every market in the automotive world? BMW continues to push their SUV and crossover models, the new 2 series is sure to be a hit with the younger generations, and their 3 and 5 series sedans are still experiencing strong sales figures this year.

What are your thoughts on Cadillac and or BMW? Is Cadillac ready to take the stage? Or do you not like both and prefer an Audi, Mercedes Benz, or maybe even Volvo due to what they’ve been doing lately. The great thing about the automotive world is that it’s constantly evolving. What might be exciting and popular today, might be old news by tomorrow. Right now BMW is still riding on their popularity over the past decade, while Cadillac is trying to revitalize their sluggish sales figures and create a buzz for their cars that hasn’t been seen in years.

Lower Gas Prices Are Still Not Enough For Consumers To Buy Big SUV’s

Cadillac Escalade SUV
Bruno Rs / Foter / CC BY-NC-ND

The national average for gas is below $3.00 a gallon which has affected different markets in the automotive segment of the economy. Electric and hybrid cars have seen lower sales figures since the recent nose-dive oil has taken the past few months. However, with these lower gas prices, sales figures for large SUV’s still hasn’t improved, and just as the sports car market, the bigger SUV market may never recover.

Ian Robertson, a Sales Chief for BMW said recently that the age of the sports car is coming to a close and that we’ll probably never see that market recover. While he only mentioned two-door coupes, it appears that the recession has also put another segment of the auto industry on life support. Larger SUV’s such as the Cadillac Escalade and the Chevrolet Tahoe are only maintaining a 7% share of the market, which that number has flatlined since 2009. Not even lower gas prices are helping this segment. Since the recession and the days of $3.00 a gallon, car companies have had to adapt to a new economy, one in which the consumer is very careful about spending and expenses.

The crossover SUV’s have taken a bite out of the traditional SUV’s market share which could explain why we’re not seeing improving sales figures. Crossovers and small SUV’s such as the Volkswagen Tiguan, BMW X1 and X3, Mazda CX-5, Audi Q3 and Q5, Ford Escape, Volvo XC60, and Honda CR-V, are all eating away at the sales figures of their bigger siblings. Car companies aren’t just stopping there, they’re continuing to grow the crossover segment as Mazda already has a CX-3 in the works, and seeing the competitiveness of the Germans, who knows what they’ll think of next.

Consumers have also adapted to the new economy that we’ve lived in for the past seven years. They’re learning that they don’t need a huge SUV to get around and that even with a smaller vehicle, they can still carry their groceries, drive their kids to school, and while doing that, saving money at the pump. Smaller SUV’s and crossovers have become the new practical. While Americans won’t admit it, they’ve become more like Europeans since the recession, as Europe has been living with high gas prices way before the economy had it’s downturn.

We live in a new world. The economy may or may not have recovered, or some sectors have while others are still lagging behind. But one thing is for sure, the auto market will not change the direction it’s heading in unless there is a major swing in the markets and on Main Street. In 5-10 years, we may look back on the recession as the killer of the big SUV and sports car markets as we once knew them.

Are Sports Cars Becoming A Thing Of The Past?

Er hat bestimmt eine tolle Klimaanlage.
ingrid eulenfan / Foter / CC BY-NC-SA

As we’re heading into the fifteenth year of the new millennium, the automotive world has changed quite a bit from twenty years ago. Sedans have more powerful engines, which means more horsepower, smaller SUV’s and crossovers can be found in almost every car manufacturer lineup, and technology in both the engine and the interiors of vehicles have now taken precedence over power. When it comes to the traditional sports car, is their time coming to and end? BMW’s Sales Chief Ian Robertson thinks so.

“The sports car market is roughly half of what it used to be,” Robertson told Bloomberg. “Post-2008, it just collapsed—I’m not so sure it’ll ever fully recover.”

To keep his comment in context, he’s not referring to the exotic luxury sports car market that includes Ferrari and other premium brands. Two-door coupes in general have been waning, and to take their place, sedans which used to be seen as for the average adult, now have sports packages that certainly would make a consumer question the long term value of buying a coupe.

Two-door coupes really aren’t that practical for families, or young adults who want to drive their friends around town. There’s less carrying capacity for both people and groceries which could definitely be a hassle if you’re moving into a dorm or shop frequently. Looking at how the automotive world has evolved over the past decade there are certainly better options out there for the average consumer.

Hatchbacks and sedans today offer everything the car enthusiast and everyday driver wants from a car. Cargo space, seating capacity, and more importantly stronger engines with more horsepower. While some would say sports car have a better center of gravity and can take turns better, how important is that to people who just want to get from Point A to Point B?

Sports cars have been on the downward trend. However, while the sports car market is slowing down for automakers, Ford, GM, and Dodge have re-introduced the muscle car to the American driver. Ford’s new Mustang that has the body style of the 1960’s, Dodge’s Charger and Challenger Hellcats that pack a whopping 707 horses, and Chevy’s Camaro are all grabbing the attention of sports car drivers. But other than the Americans, many car companies have turned their focus to serving the consumer who wants a four-door.

Even Porsche has slightly strayed from their identity as they’ve come out with to SUV’s and the four-door Panamera. Volkswagen is discontinuing their Eos, Volvo stopped producing the C30 and C70, Mazda has no plans to remake an RX-8, Chrysler is putting more focus on the 200 sedan rather than the coupe which they do offer, BMW is adding a four door to their 4series, and Audi has released sketches of a four-door TT. The trend in the automotive market is moving towards sedans and SUV’s, and whether that has anything to do with the fact that they’re more practical, or manual transmissions (which are usually found on sports cars) are becoming a thing of the past, we can’t lie to ourselves and think that Ian Robertson is wrong.

As I said before, he wasn’t saying anything about the exotic sports car market which is seeing strong sales numbers; he’s referring to the market that BMW is in. Consumers want smaller four-door cars, and that’s what we’re seeing car companies building. While Ian Robertson might be right about the sports car market, the four-door sedans of today have that sports car identity built in them that makes the Dodge Charger, Chrysler 200S, Audi S4, and the Lexus IS-F very popular cars.

The Issue Cadillac Faces, Whether They Produce Nice Cars Or Not

2015 Cadillac ATS Coupe
That Hartford Guy / Foter / CC BY-SA

Prior to the past decade and a half, Cadillac was always held in high regard as the premier luxury car brand in the United States. Fifteen years later that same luxury brand now faces stiff competition from Mercedes Benz, Audi, BMW, Lexus, and Infiniti, and is usually forgotten when it comes to facing these competitors head on. Cadillac is now suffering from it’s own brand and the marketing that went on behind the scenes that got them to this point in their history.

Cadillac has always been known as the old man’s car to younger generations. It doesn’t help when Cadillacs are often seen in funeral processions either, as this easily dictates how millennials perceive the American luxury brand. From the commercials 10-15 years ago with the Rolling Stones music chiming in near the end of the ad, to even the appearance of the car itself, Cadillacs were meant for the older population, even if that’s not the intention of the car manufacturer. With baby boomers getting older, it’s time for GM’s luxury brand to start appealing to younger generations. But how do they do that after decades of targeting the affluent aging population?

The new Cadillac ATS V Coupe has turned heads, making some believe that it could take on The BMW M4. But here’s the underlying issue. Whether the ATS V Coupe is faster or more luxurious than the M4 or not, younger people are more likely to go with the BMW, that’s just a fact. As a single, 21 year old, the last car I see myself being behind the wheel of is a Cadillac, unless they can prove to me that I will get noticed and get the attention I want. A BMW on the other hand already turns heads. The German engineering along with the fierce appearance makes the driver feel powerful and ready to take on the world. The Cadillac’s image is more of retiring from the workforce and signing up for AARP. That might be a crass statement, but it’s the perception, and the belief that people from my generation hold against the automaker.

Sure the new ATS looks great, but would I buy it if I had the money? No. Cadillac is however moving in the right direction, you have to give them that. The newer models are a bit more refreshing than in years past, and the 0-60 acceleration times along with the engines that Cadillac uses certainly makes the car more appealing, but until the old man perception is gone, that’s all young people will think about.

Lastly, Cadillac needs commercials geared more to younger generations. For instance, the Escalade commercial shows Cleopatra, a stage coach, presumably in England, and a powerful leader on an Elephant, and to brutally honest, I could see a 2000 year old Egyptian queen and a 300 year old wig wearing gentleman driving a Cadillac. That’s the real problem. With better ads directed to younger generations and creating a buzz, it will certainly help their long term perception and image.

More Car Buyers Are Leasing and That’s Good For You

The percentage of Americans leasing cars has boomed to 20% over the past few years. Rough economic times, better leasing offers, and car manufacturers creating better vehicles has helped spur the growing number of consumers leasing instead of buying new. Some car dealers may prefer that most consumers would much rather buy, and that leaves the opportunity for those who buy certified pre-owned vehicles with an endless array of quality cars at reasonable prices. As with most trends in the economy, there is always an opportunity for someone to walk away with a great deal, and right now it’s time to take advantage of the leasing craze that is growing across the country.

Tesla just unveiled a leasing program for their Model S, which will now make monthly payments cheaper for the consumer.

From the Wall Street Journal

With sales of its electric sedan declining in its home market, Tesla Motors Inc. this week launched U.S. incentives that cut its monthly lease price and aim to convince potential customers that buying the car is a safe financial bet.

Tesla Chief Executive Elon Musk said the Silicon Valley car maker is joining with U.S. Bank to cut monthly lease payments by as much as 25%. In a blog post on Saturday, he credited the bank’s lower cost of capital for the lease-rate cut. He also unveiled a “happiness guarantee,” promising to take back cars within the first 90 days of ownership “if you don’t like your car for any reason.” The return policy doesn’t allow a buyer to swap for another vehicle.

While some would say this is because of declining sales, this is happening across the board for most auto manufacturers. Leasing is becoming the new normal, especially with the uncertainty of the long term health of the economy. You might ask, “So where are the opportunities?”. Here are three cars that are under $25,000 and are from luxury brands that can be found on dealership lots. Best of all, they’re certified pre-owned and the mileage is below 31,000.

1) Volkswagen GTI/Wolfsburg Edition

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It’s not too uncommon to find Volkswagen Golfs, but to find multiple GTIs spanning from the years of 2011-2013 is very surprising. Even better for the consumer, there are a few Wolfsburg edition GTIs on the market that are under $25,000, one of which has only 5,000 miles on it. These are gems, and with the turbocharged engine that supplies 200 hp, you get performance and cargo room which is always a plus.

2) 2011 Lexus IS 250

2011_Lexus-IS-350_Sedan-Image-01-1024

To see these under $25,000 with close to 20,000 miles is certainly an eye opener. A local Lexus dealer outside of Boston has a few of these, and even though they are the base models, they’re still fully equipped and in great condition. Navigation system and backup assist make you feel like you’re getting away with more than what you paid for, but these are the types of deals that are out there. Seeing a Lexus IS on the market in great condition and not overly driven, it makes you question why there are certified pre-owned Toyota Camry’s and Chevrolet Malibu’s in the same price range.

3) 2011 BMW 3 Series

bmw_328i_01_small

Just as the Lexus IS, the model year may be the only reason why these luxury cars have depreciated in value. There are BMW 328i X-drives that only have 25,000 – 30,000 miles on them and priced under or at $25,000. Once again, this is a luxury sedan that will make your mouth water because to see a BMW in unbelievable condition at that price was unheard of a few years ago.

When seeing offers and deals like this, it really makes you consider going the certified pre-owned route. The automotive market is evolving, and unlike 10-15 years ago, going used isn’t a bad thing, especially when you have three solid vehicles at reasonable prices. This is only the beginning though. Seeing that there is no reason to believe the leasing trend is going to slow down, there will be more opportunities down the road. Who knows what will be on the market a year or two from now, and maybe there will be better offers than there are right now.

Is Luxury Taking On A Whole New Meaning In The Automotive World?

If someone walked up to you fifteen years ago and said that Subaru, Honda, Mazda, and Toyota were making four door sedans that rivaled the Germans, would you believe them? Or better yet, if that same person told you Audi, Mercedes Benz, and BMW were offering smaller vehicles with starting prices near $30,000, would you think they were joking? The reality is, in the year 2014 the Subaru Legacy, Honda Accord and Civic, Mazda 6, and Toyota Camry and Avalon are all on par with German luxury vehicles, but for a fraction of the cost. While the big three German auto manufacturers are entering the cheaper luxury markets, the Japanese and even the Americans are meeting them with top notch vehicles that might make you question your bias towards a certain car brand.

The fact that any car can have an LCD monitor, leather seats, a spacious interior, and great fuel economy, really begs the question on whether it’s worth spending $10,000 – $20,000 more to get the same package and luxury you’d find on what used to be inferior car brands. For many, the dream of owning a Mercedes Benz or BMW will never go away, but when we were kids, who could have foreseen a Honda, Toyota, Mazda, or Subaru with a luxurious interior? What was once exclusive to those who were affluent, can now be found on most cars that were seen as average. Luxury really has taken on a whole new meaning, but it doesn’t stop there. Performance is also another feature that can be found on four door sedans that were 15 years ago, a family oriented vehicle.

You can own a Subaru Legacy with a 265 horsepower V6 engine for around $32,000, almost $8,000 less than the Audi A4 that has a turbocharged four cylinder engine with 220 horsepower. I must ask the question again, is it worth spending the extra $8,000 on an Audi when you can own a Subaru with the same comforts and styling? The Chrysler 200 has a V6 option which supplies a whopping 295 hp, completely blowing away any of the Japanese or German four door sedans in the price range of $30,000 – $35,000.

But at the end of the day, all the driver really wants is reliability with a combination of some form of luxury, and Honda, Mazda, Subaru, and Toyota can offer that. These brands speak for themselves as they’ve been known for reliability for years, but now that they’ve put in nicer interiors, leather seats, and performance for competitive prices, it’s hard to see why you’d pay extra for a car that offers the same. The only major difference is the badge on the front of the car and the recognition that brand has that catches the eyes of bystanders.

Heading into 2015, the consumer is going to have a boatload of options in the four door luxury sedan market in the $30,000 – $35,000 price range. Luxury is what you make it; the auto manufacturers are just making cars that help steer you into their direction. Owning an Audi, Mercedes, or BMW is a major feat, but when you see cheaper options that may offer more, it’s hard to say no.

Auto Marketing: Are Car Manufacturers Becoming Too Much Alike?

Let’s go back in time for a minute to the late 1990’s to early 2000’s in the automotive world. What has changed since those days? Are consumers more confused now than ever? Are car manufacturers becoming too much the same, losing that individuality and no longer catering to the loyal customers they’ve had for probably generations? These are the questions that no one is asking, and in an industry that is constantly changing, why have blurred lines appeared where consumers can’t decide on what the better brand is, and instead just go along with tradition?

In the late 90’s if you wanted luxury you probably would buy a Mercedes Benz, BMW, or Cadillac. For the average family vehicle that was reliable and safe you’d go with the Honda, Toyota, Subaru, or Volvo. The young and dangerous teenager who wants speed would maybe look at a Ford Mustang, Chevrolet Camaro, or Pontiac Firebird. And for the person that wanted a pickup truck, Dodge, Chevy, GMC, and Ford were constantly advertising on TV to appeal to that specific person.

However, today there is such a variety of vehicles in the same price range that often get forgotten, not because they’re of poor quality, but they’re neither marketed correctly nor presented as an individual car manufacturer that stands out from the competition. For example, the average consumer who has no loyal ties to one specific brand will look in multiple categories such as, fuel economy, safety, performance and price. Yet most likely, they’ll only compare the car brands and models that are most prevalent in their lives that have been marketed to them constantly over the years.

As I wrote in a previous article, the 2015 Chrysler 200 is priced from $21,000 to $31,000, putting it in the same price range as the Toyota Corolla, Volkswagen Jetta, Honda Civic and Accord, the Mazda 6 and the list could continue on for a while. What the average consumer who wants performance while still owning a four door sedan doesn’t realize is that the 200 comes with a V6 engine that supplies 295 horsepower, completely blowing away the competition in it’s class in performance. Any one of the cars listed are also subjected to the same reality that poor marketing and a person’s personal preference completely drives their buying habits.

Let’s take a look at the new crossover SUV market that is constantly growing that includes the BMW X1 and the all new Audi Q3. Besides looking good, and for BMW and Audi the brand recognition, what do they really have to offer that other manufacturers can’t? Because luxury brands are now entering markets that are now rivaling Ford, Honda, Toyota, Volkswagen, and Mazda, consumers will now look to just the luxury brands and skip over what the traditional brands in that price range offer.

What used to be a black and white market has now become an array of colors, and while that is great news for the consumer, the manufacturers may end up losing in the end. If the consumer wants a small compact sedan, they’re going to be attracted to the Audi A3 or Mercedes Benz CLA without looking at what the other auto brands have to offer. The sports car market has remained the same over the years, as there is still a price margin wide enough where younger consumers will look to the American muscle cars over the BMW 2 series and others in that category.

The auto market has certainly become competitive, but along with it is the loss of individuality. Most have LED lights, leather seats, MP3 capability, power windows, keyless entry, and other technologies and comforts that were only found on the most luxurious of brands in the late 90’s. There needs to be better marketing strategies from auto manufacturers, whether that be target advertising, or mass marketing that reaches a variety of different people. BMW, Audi, and Mercedes Benz will be catering to a whole new audience; the audience that once bought Hondas, Toyotas, Volkswagens and Fords. TV commercials aren’t enough anymore as brand recognition is enough for consumers to get fixated on one manufacturer.

Right now there are multiple options at all different price ranges, but the consumer doesn’t know it. These auto manufacturers need to become unique again and cater to the specific audience they knew would buy their brand for many years to come. For the time being, the German luxury car segment is taking over, and if the other manufactures don’t step up their game, they’ll be in a for a rude awakening if and when Audi, BMW, and Mercedes Benz introduce the smaller vehicles they’ve been selling in Europe.

Maserati is Launching the “Cheaper” Ghibli Starting at $68,000

Maserati Ghibli en México DF
Daniel Palestino / Foter / Creative Commons Attribution-NonCommercial-NoDerivs 2.0 Generic (CC BY-NC-ND 2.0)

With Maserati’s sales up 357% from last year, the Italian automaker is looking to enter a new market; luxury sedans in the price range starting close to $68,000. It is no secret that Italian cars are slowly becoming more prevalent as they’re becoming cheaper and more models are storming the American shores every year. The Ghibli will be competing with the likes of the Audi A7 and Porsche Panamera, giving consumers a dilemma whether to go German or Italian.

If you still prefer German engineering, maybe a Ferrari engine and a chassis and suspension of the more expensive Maserati Quattroporte will persuade you to at least consider buying the Italian sedan. However, even with the lower price, the Ghibli still doesn’t offer the more powerful twin-turbo V6 that supplies 404 hp that can be found on higher end trims of the Ghibli that are no doubt more expensive.

This is really where the problem lies. To get performance and luxury you must pay more to get it. While owning a Maserati puts you in a more exclusive club, there are other options out there that won’t completely drain your bank account.

Now of course you’re not going to get the same ambiance and perception that you will in a Maserati, but the Audi S4 and BMW 535i X-drive do offer a relatively cheaper alternative and you’re not sacrificing much horsepower with the “cheaper” German sedans. As an added plus, fuel consumption is much better with the Audi or BMW as opposed to the gas guzzling Maserati Ghibli.

The engine in the base model Ghibli supplies 345 hp, while the Audi S4 receives 333 hp, and the BMW 535i X-drive gets 300 hp. We’re not talking about a major loss in power, as both the Audi and BMW offer the same luxury and sports car appeal the Maserati does; the name however does make all the difference.

It really comes down to preference, but with the looks of things, maybe waiting a bit longer to buy an Italian car might pay off. Slowly buy surely prices are receding and if you do want a Maserati, the price tag is entering the realm of possibility.

Audi S4

• MSRP Starts at $48,100
• HP 333
• MPG 17 in the city – 26 on the highway

BMW 535i X-drive

• MSRP $60,000
• HP 300
• MPG 26 in the city – 37 on the highway

Maserati Ghibli

• MSRP $68,000
• HP 345
• MPG 15 in the city – 25 on the highway