Inside GM’s battle to revive Cadillac as the American luxury car brand

WARREN, Mich. — Walking into General Motors’ global design headquarters is like taking a step back in time. Much of the midcentury-modern architecture and designs have remained untouched since the space opened in the 1950s.

The massive tech campus was built during a time when the Detroit automaker reigned supreme. It was GM’s so-called “Golden Era,” with its luxury Cadillac brand leading the way as “the standard of the world” — before decades of U.S. market share declines amid increased competition from BMW, Mercedes-Benz, Lexus and others.

GM President Mark Reuss wasn’t alive to witness that, but he’s harkened back to it as he and his teams have methodically overseen a product renaissance for Cadillac, which wants to regain its prominence as the American luxury brand.

“There isn’t a lot of American luxury brands. There just isn’t. I think it’s time, and I’m deeply passionate about that, for GM and Cadillac to show the world what we can do,” Reuss told CNBC from his second-story office adjacent to the lobby.

Cadillac’s domestic competition has historically been Ford Motor‘s Lincoln luxury brand, which sells roughly a third of the vehicles in the U.S. as its GM competitor. Other luxury brands from Germany, Japan and, more recently, South Korea have entered the market as well. All-electric vehicle competitors Tesla and Lucid Group are also in the mix.

The luxury vehicle market is crucial for automakers. The vehicles have higher profit margins than their mainstream counterparts and cater to a more affluent customer that views them as much as a status symbol as a mode of transportation.

Reuss’ responsibilities as president include overseeing all the automaker’s products and brands, but he has always taken a special interest in Cadillac, which is on its fourth leader since 2015.

Those involved with the brand have described Reuss as a protector, vanguard and even spiritual leader of sorts for Cadillac.

While not everything has gone perfectly to plan — there have been issues with sales in China and electric vehicle production and adoption — Cadillac has largely stayed true to a plan that the company undertook to bolster the luxury brand a decade ago. It’s a not-so-easy accomplishment amid regulatory uncertainty and budget cuts in an automaker the size of GM.

“If you would have looked at Cadillac’s financials and portfolio, it was not delivering,” Reuss said. “It’s been a long road taking a 150-year-old brand from where it was, which was not healthy. It was not ‘the standard of the world.’ Still isn’t. We’ve got work to do, but the vision is there and it’s pretty clear.”

That vision currently relies heavily on all-electric vehicles, sporty sedans and the brand’s flagship Escalade — one of GM’s longest-standing and most prominent nameplates — to bring Cadillac back to prominence.

It’s a race Cadillac executives describe as having a never-ending finish line.

In the summer of 2018, Reuss, GM design chief Michael Simcoe and then-Cadillac head Steve Carlisle, among others, mapped out what they wanted Cadillac to be ahead of a broader executive rollout at GM’s renowned design dome. It was a re-evaluation of sorts of a plan laid out for Cadillac in 2015.

The overall strategy was to largely isolate Cadillac’s products from GM’s other brands and not allow the sharing of consumer-focused parts. They would share some bones, motors and other powertrain parts, but the interiors and even some of the engines would be exclusively Cadillac.

“We wanted to lay tracks down in terms of what the brand could be. We didn’t have a very consistent approach,” Carlisle recalled during a phone interview. “Many have tried and most have failed.”

The idea was to get Cadillac’s portfolio back into shape with sporty, sleek vehicles that elevate the brand’s status and, in turn, lead to higher residual values of the vehicles. The brand also sought to lower incentives.

Reuss, around that time, described it as Cadillac’s “one chance,” saying the Detroit automaker would “leave nothing on the table.” 

Cadillac has largely been able to get its house in order with most of those objectives, according to executives, auto analysts and industry metrics.

“Right now, I think they’re in really good shape.” said Stephanie Brinley, principal automotive analyst at S&P Global Mobility. “They have been more consistent with how to handle the Cadillac brand, and that’s going to continue to be incredibly important … consistency over time is one of the most important things you can do.”

Cadillac decided to focus its future products to be all-electric vehicles, in a bid to compete with Tesla’s pricey Model Y and Model X at the time. The plan was for Cadillac EVs to eventually take the place of gas-powered models as soon as 2030, but now it’ll offer a full lineup of EVs as well as gas-powered vehicles.

The first product released under the new strategy was the all-electric Lyriq that went on sale in 2022, but the pinnacle of the plan is the bespoke, $300,000 Celestiq that the brand is currently “relaunching.”

The 2018 showing at the design dome – hallowed ground for the automaker – was crucial to sell the current vision of Cadillac, according to Simcoe, Carlisle and others involved.

“In the dome, there was a vision for Celestiq and the Cadillac requirements,” Simcoe told CNBC from his corner design office overlooking the dome. “It was basically all the things that would define the brand.

“There was a vision for the customers we’re addressing. There was a vision for the portfolio we needed. There was a vision for pretty much everything inside the business,” Simcoe said.

The dome show took place after the exodus of Cadillac’s last president, Johan de Nysschen (all other Cadillac leaders since have been vice presidents), who had discussed the need for the brand to have its own vehicle platforms and powertrains.

De Nysschen, an auto industry veteran who’s also led Audi and Infiniti, said he believes Cadillac “has made a lot of progress” since his departure. “I am pleased to say, in broad terms, that they’ve stayed true to the strategic direction that we had been agreed upon with GM top management,” he said during a phone interview.

GM’s rule of thumb has been to prioritize “volume over value,” which includes achieving scale on mainstream models ahead of producing luxury vehicles such as Cadillacs.

The strategy has helped GM’s profits but it’s been a challenge for Cadillac at times. It’s caused the brand to be late to vehicle segments and resulted in products such as the short-lived Cadillac ELR (a version of the Chevrolet Volt) a decade ago and, more recently, the outgoing XT6 crossover.

That is no longer the case for Cadillac as it’s refocused, officials said.

For example, there were expectations that GM would do a Cadillac version of the mid-engine Corvette, but Reuss said such a vehicle would not have fit into the brand’s new strategy, noting it would have shared a majority of components with the Corvette.

“It was developed as a secondary car to the Corvette, on purpose. We would never do that,” Reuss said, citing potential room for additional specialty, Cadillac-specific vehicles outside of its $300,000-plus Celestiq.

The all-electric Celestiq is a bespoke vehicle that the company is hand building at its tech and design campus in Warren. It was always meant to be low-volume production but orders as of the end of last year were only in the dozens.

After delayed starts to production and sales, Reuss said GM is essentially relaunching the car after the automaker has gotten its software — a crucial part of the business — in order.

“Just to be really transparent, we struggled launching our regular EVs, and so we’ve built our software capability to really execute and execute on time,” Reuss said. “We didn’t want to execute the car without everything being perfect on the software front. … To be honest, we’re relaunching the car.”

First customer deliveries of the Celestiq are expected by midyear, according to the company, which declined to disclose how many orders it has received for the car.

If successful, it could create a new two-unit business model for the company: one focused on hand-built, high-end vehicles and the other on mass-produced models.

Wall Street is starting to once again take notice of Cadillac inside GM’s business, as other growth opportunities have faltered.

“One of the real gems is Cadillac that we don’t think gets enough airtime and there’s huge opportunity,” BofA analyst John Murphy said at an investor conference last month with Cadillac’s current leader, John Roth.

The decade-long plan for Cadillac also has the brand’s momentum building, particularly in North America — its home market.

During the first quarter of this year, Cadillac reported an 18% increase in sales, including its best retail performance since 2008, Roth said. It hit that while offering among the lowest incentives as a percentage of sales price on record average transaction prices of $77,900.

“That’s building brand health. That’s building brand value,” Roth, Cadillac global vice president, said at the BofA conference. “It’s a growth brand.”

April sales were the brand’s best for that month since 2007, GM CEO Mary Barra said on a call Thursday. She noted all of its U.S. vehicles are produced in America – a potential advantage over German luxury brands and others.

“So there is a huge opportunity for us to continue to build and leverage our product strength and the fact that these vehicles are built in the U.S.,” Barra said.

Reuss declined to comment on potential impacts to Cadillac as a result of tariffs, but said the American brand is well positioned to continue to grow.

While Cadillac grows domestically, Cadillac’s sales in China — its largest market for years until 2024 — have been in a freefall. It’s an industrywide problem, as Chinese brands grow in the country, dominating Western brands such as Cadillac, BMW and others.

“China is difficult for everyone. How Cadillac addresses that and improves that is not entirely in their control,” Brinley said. “Their products are strong, but I think the dynamics in China are just not in an imported brand’s favor right now.”

Cadillac’s sales in China peaked at nearly 232,000 vehicles in 2021, representing 62% of Cadillac’s global sales. In 2024, Chinese sales totaled roughly 110,400 units, or 38%, of its 294,200 sales globally — marking the first time since 2015 that they’ve dropped below 300,000.

Reuss, GM’s president, said China remains a focus for the automaker, which also is attempting to return to Europe with Cadillac. GM exited the market after selling its European operations in 2017.

Reuss declined to discuss sales targets for Cadillac, but said both China and Europe continue to have a “major role” to play for the brand’ renaissance.

“I think the way we execute vehicles globally will change, but Cadillac will be there with the latest and greatest, and we need to rebuild the sales capability, which we’re doing,” Reuss said.

Cadillac last year remained off the winner’s podium in terms of sales. It was fifth in the U.S. and seventh globally, according to industry data confirmed by Cadillac. It trailed global leader BMW as well as Mercedes-Benz and Audi, among others.

Roth last month said the brand’s success includes sales, but Cadillac’s goals are multifaceted and the race to profitably grow Cadillac continues.

“We talk about Cadillac being the ‘standard of the world,'” Roth told investors last month. “Every day that standard never has a finish line. We keep moving that finish line, keep raising the bar on what the brand needs to stand for in the marketplace and keep growing and evolving the brand on a forward-looking basis.”