By Mark Kleis
Tuesday, Mar 9th, 2010 @ 9:38 pm
 
Cadillac has begun enacting major policy changes in an effort to distance the luxury brand from its parent company, General Motors. Cadillac has been owned by GM since 1909, but now wants to establish itself as a unique luxury brand away from the negative publicity associated with GM's bailout funding.



Cadillac embraces change, shuns General Motors
According to a new report by Bloomberg, GM's most luxurious brand, Cadillac, is looking to reverse the parent company's decision five years ago to begin badging all GM products with a common GM emblem.

Cadillac's first moves to separate itself from GM include changing corporate e-mails from the current @GM.com domain to @Cadillac.com, dis-including the Cadillac brand from GM-wide sales events such as the Red Tag Event and removing the GM branding from Cadillac vehicles and dealerships. A Cadillac representative, Nick Twork, told Bloomberg about the changes and said that they were "absolutely" driven by the ongoing restructuring taking place at GM.

Why the change? Why now?
John Grace, president of marketing for consultant firm GrandTaxi LLC, said, "Cadillac, which has really turned itself around with new levels of quality and exemplary products, doesn't want to be associated with something that will drag it down," referring to GM.

The main reason behind the damage from the GM brand stems from the highly public bailout funding to the automaker. GM's roughly $50 billion government bailout in 2009 has created a stigma that is driving many buyers away, and Cadillac hopes that by distancing itself from the brand name typically associated with the bailout - GM - it will be able to avoid the negative stigma.

Evidence suggests Cadillac needs significant changes
Cadillac has struggled the most out of GM's remaining core brands, dropping 32 percent in 2009, 2 percent worse than the industry average. In 2010, Cadillac has increased sales by only 14 percent, the lowest of GM's brands which reported a combined 31 percent increase.

Cadillac's last annual sales increase took place in 2005 when the luxury brand sold a healthy 235,002 units - an increase of 0.3 percent. By contrast, Cadillac's volume has slid low enough that the automaker is hoping for a 28 percent increase in annual sales for a total of 140,000 units.

Light at the end of the tunnel for Cadillac
The news isn't all bad for the luxury marquee, as Cadillac has enjoyed comfortable sales gains from some new models such as the SRX crossover - which enjoyed a 400 percent increase in year-over-year sales last month. Cadillac also has new and competitive sedans that are challenging German luxury automakers with outlandish performance numbers and improved interiors. The brand has also undergone massive changes in its design language inside and out, hoping to appeal to more youthful buyers.

The move away from GM only continues the brand's efforts at a major face-lift.

References
1. 'Cadillac distances from GM...' view
2. 'Large wagons lift GM...' view