The 10-Year Plan to Make Cadillac Cool Again

By Mike Colias Features Dow Jones Newswires

Johan de Nysschen became an auto industry rock star while helping transform Volkswagen AG's Audi brand into a luxury powerhouse in the U.S. from late 2005 to mid-2012. Then General Motors Co. came calling in 2014 with another rebuilding project: Cadillac.

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Now president of Cadillac, Mr. de Nysschen viewed the challenge as "the pinnacle of my career." One-third of the way through what he views as a decadelong project, the journey has been less than smooth as the Cadillac's U.S. market share has sagged and the company awaits new models to round out a threadbare product portfolio.

Mr. de Nysschen, 57, aims to mold Cadillac in the image of BMW and other luxury brands. That means creating a better dealership experience and ending big consumer incentives such as cheap leases and end-of-month discounts that often fueled sales.

His strategy also included relocating Cadillac two years ago from Detroit to Manhattan's Soho neighborhood, the better to give the brand an identity separate from GM. But disentangling Cadillac's operations from Detroit has proved frustrating at times. In 2015, Mr. de Nysschen jokingly described his first year running Cadillac as "the longest five years of my life."

There's a bright spot though: Cadillac sales are booming in China. In an interview, Mr. de Nysschen said he is counting on growth in China to expand Cadillac beyond its home market for the first time.

Edited excerpts:

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The Wall Street Journal: You had a great run at Audi and were just starting to make progress at Infiniti when you took the job to rebuild Cadillac. Why?

Mr. de Nysschen: Cadillac is a truly iconic luxury brand, one with a 115-year pedigree. To have the opportunity to steer that back to greatness was an opportunity you couldn't say no to. And General Motors has the resources, both in technical engineering and financial, to push the transformation.

WSJ: Three years in, Cadillac continues to lose U.S. market share. What's holding you back?

Mr. de Nysschen: An important part of the plan is globalization. For us, the top priority was China. In China, it's about rapid growth -- it's about elevating awareness, it's about expanding the dealer network -- in a very forceful manner in a very short period of time. So we invested very heavily into a state-of-the-art manufacturing plant. We're investing in building the brand profitably. It's consuming a lot of resources.

WSJ: The U.S. is a different challenge?

Mr. de Nysschen: In the U.S., the focus is not on growth. If you achieve sales results without looking at the quality of the business, it's not sustainable. Three or four years ago, Cadillac incentive spending was significantly above the luxury average. We had to instill this discipline. If in the near term it means that we have to walk away from some volume, then so be it.

WSJ: How hard is it to change the perception of Cadillac?

Mr. de Nysschen: People might still be thinking about Cadillac as they would have 15 or 20 years ago. The current vehicles are full of product substance equal to our peers. The challenge now is to build awareness of that excellence, and ensure it is complemented by the retail experience. But great brands are not built overnight. It will take time.

WSJ: Given the long time horizon, how do you keep your people motivated?

Mr. de Nysschen: It starts by making sure everybody understands the vision and the long-term aims for the brand and the tactical execution. That cascades down to individual goals and objectives that people are held accountable to. As long as we're able to demonstrate that we're making progress on those, it's easy to get people engaged.

WSJ: The New York move was meant to give Cadillac autonomy from GM. How's that going?

Mr. de Nysschen: We are semiautonomous. We don't just do what we feel like. The issue was to ensure that, in those areas [including marketing and retail strategy] that Cadillac needed 100% mindshare, those discussions took place among people who are invested in the brand. If you didn't' change the location, the meetings wouldn't change, the faces wouldn't change, and probably the outcomes wouldn't change.

WSJ: Cadillac is touting Super Cruise as the industry's first hands-free driving system. Should that help the brand image?

Mr. de Nysschen: It begins to resuscitate Cadillac's heritage of innovation. It will surprise those people who think Cadillac's audio system features an 8-track player. It does not.

WSJ: When we eventually get fully autonomous cars, will people care as much about luxury brands built on their reputation for performance?

Mr. de Nysschen: We don't envisage producing Cadillacs with no driving controls. A Cadillac will always be an exhilarating driving experience. But, when you'd like to have the car do the driving for you, our vehicle will offer that opportunity. True luxury means the ability to choose.

Write to Mike Colias at Mike.Colias@wsj.com

(END) Dow Jones Newswires

October 25, 2017 08:14 ET (12:14 GMT)