Johan de Nysschen was plenty skeptical when General Motors Co. asked him to run Cadillac.
De Nysschen helped make Audi a real contender in the U.S. and had recently joined Nissan’s Infiniti. Why jump to Cadillac, a brand that actually sold fewer vehicles last year despite a boom in luxury automobiles?
De Nysschen spent hours on the phone with GM President Dan Ammann to make sure this was no vanity project. The clincher: GM agreed to invest heavily in Cadillac, eventually budgeting $12 billion for the next five years, or more than a quarter of the sum being spent on new models companywide. Ammann & Co. also pledged to give de Nysschen enough time and people to get the job done as part of a plan to split Cadillac into a company that’s now based in New York.
GM is counting on Cadillac to drive profits in the next decade. Luxury cars make up just 10 percent of the 100 million cars sold globally every year but haul in 50 percent of the profits. GM will be less able to rely on fat truck margins to keep it solidly in the black because tightening fuel economy standards in the U.S. could push up production costs.
Making Cadillac a serious competitor to German luxury brands will be a heavy lift, but de Nysschen says GM has little choice but to try.
“The company needs to capture its rightful share of the profits available in the global luxury market,” he said.
Brooklyn Party
Tonight at a party in Brooklyn, de Nysschen, 55, will unveil a new CT6. Cadillac’s flagship sedan also will be on display this week at the New York auto show, where luxury vehicles traditionally take center stage. The CT6 was under development long before de Nysschen showed up, but he has ambitious plans to fill out Cadillac’s lineup to compete with other luxury brands. Three of the five planned new models will be crossover SUVs, a fast-selling segment.
When the South Africa-born de Nysschen became Cadillac president in August, he was surprised to find he had few dedicated product planning, marketing or sales people. Under GM’s centralized system, many worked for all four of the company’s brands. De Nysschen sometimes waited till the afternoon to get a meeting because the product planning and marketing people were toiling for Chevrolet, Buick or GMC in the morning. This doesn’t happen at BMW, Audi and Mercedes, he said.
De Nysschen now has 40 people in New York working in product planning and development, advertising and marketing -- plus a few dedicated engineers and designers. He expects the staff to grow to 150 people by the end of the year.