GM'S CADILLAC AND THE LUXURY MARKET

This research provides selected information about General Motor's Cadillac line of automobiles, the luxury automobile market in the United States, and selected additional information related to the automobile industry in this country. This additional information includes automobile leasing, automobile rentals, automobile manufacturer market shares, division market shares within General Motors, Ford Motor Company light vehicle sales, Japanese automobile production in the United States, government regulation of the automobile industry in the United States, and Cadillac Division promotional strategies.

Cadillac and The Luxury Automobile Market

The initial information presented in this discussion of the luxury automobile market described the competing products. The automobiles competing in this market are reviewed in alphabetical order, and are as follows:

1. The Acura Legend is a mid-sized luxury automobile. The prices for the various models (L, LS, and GS) of the Legend range from $33,800 to $41,500 (Profiles, 1994, p. 222).

2. The Cadillac Concours/De Ville is a large-sized luxury automobile. The price range for the Concours/De Ville is $32,990 to $37,990 (Profiles, 1994, p. 224).

3. The Cadillac El Dorado is a mid-sized luxury automobile. The price range for the El Dorado is $37,690 to $40,990 (Profiles, 1994, p. 224).

4. The Cadillac Fleetwood is a large-sized luxury automobile.

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e Japanese manufacturers in the mid and lower segments of the American new car market, they have also been accustomed to having almost complete control of the high-profit luxury end of the market--automobiles with list prices exceeding $29,000. The heavily promoted Mercedes and BMWs have not posed serious threats to American market shares. In 1992, Mercedes sold approximately 32,000 cars in the United States, and BMW sold approximately 26,000. During that year, Cadillac sold almost 300,000 cars, and Lincoln sold approximately 235,000. European cars, however, do dominate the high-end of the luxury car market in the United States. The Japanese luxury car entries were initially in the mid-range of the luxury car segment. By 1991, however, the Japanese manufacturers had also introduced models for both the low-end and the high-end of the luxury car market. In 1992, approximately one million new cars were sold in the luxury segment of the American new car market. Cadillac and Lincoln together held approximately one-third of the market. Lexus (Toyota), Infinity (Nissan), and the Acura Legend (Honda) held approximately 12.5 percent of the market. The Japanese market share is remarkable, because it represented

Category: Business - G