Editorial

Here's Why Cadillac Could Soon Become The Ferrari Of GM

We promise you this isn't totally crazy talk.

We know Ferrari and Cadillac are two very different automakers. One is an Italian supercar company with a production cap of 7,000 units per year. The other is an American luxury car maker that sold 263,697 cars last year and has designs on selling 500,000 globally by 2020. So why do we think Cadillac could become GM’s Ferrari? It all has to do with what the automaker's president, Johan de Nysschen, recently told a group of Wall Street analysts at New York’s J.P. Morgan Auto Conference.

De Nysschen told the crowd that by 2017 Cadillac will have "a far higher degree of autonomy and self sufficiency” and will begin reporting its own profit-and-loss statements. "For now, you'll have to accept my assurances that Cadillac at this state makes a very sizeable contribution to the overall profit at General Motors," he said. Fiat Chrysler Automobiles (FCA) is spinning off Ferrari, with its IPO already filed. The supercar company is said to make up a huge chunk of FCA’s profits, and with the spin-off it will begin reporting its profits and losses separately from the group. Does that sound familiar? There's no way Cadillac is as valuable to GM as Ferrari is to FCA but it will be interesting to see how much it contributes to GM's profits.

Now Cadillac has no plans to cut its total units, as indicated by its 2020 sales goals, and according to de Nysschen is actively working to introduce more models. Ferrari on the other hand is leery of upping its production for fear of damaging the brand. Despite being on opposite ends of the production spectrum the two automakers share the common goal of wanting to protect the brand's image, whether it be by production caps or improving dealership service. And as both marques will soon be autonomous from the respective groups that control them, you can now see why we think Cadillac could one day soon become the Ferrari of GM.

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