Wherever You Go, There You Are

Soho may be “the epicenter of sophisticated living” but is Soho or New York City the epicenter of car culture?

On July 1, 2012, Johan de Nysschen became senior vice president of Nissan Motor Company in charge of the Infiniti division.  Prior to that, he had been president of Audi of America.  During his tenure at Audi, the company had a relentless gain in sales and share in the U.S.

One of the first things that de Nysschen did at Infiniti to move its headquarters to Hong Kong, which de Nysschen described, when Infiniti later opened its first showroom there, as “a uniquely discerning luxury car market.”

After a couple of years at Infiniti, de Nysschen left and was named, this past August 1, as the president of Cadillac.

Upon the announcement, de Nysschen said, “The recognition of the brand is immense, and the progress on the product front is widely acclaimed.”

And a few weeks later, on September 23, it was announced that Cadillac would become a separate business unit, and that it would be moving its global headquarters from Detroit to New York City.

About that, de Nysschen said, “We are very proud of our Detroit roots and heritage, and the majority of the Cadillac workforce will remain in Michigan.

“But there is no city in the world where the inhabitants are more immersed in a premium lifestyle than in New York.  Establishing our new global headquarters in Soho places Cadillac at the epicenter of sophisticated living.  It allows our team to share experiences with premium-brand consumers and develop attitudes in common with our audience.”

And that statement is just loaded with implication.

For example:

  • Wouldn’t, arguably, Hong Kong be a place where “the inhabitants are more immersed in a premium lifestyle”?  To be sure, in light of the loan guarantees that were made by the U.S. government, moving Cadillac to China would have been a bit controversial, but isn’t the play to go where the luxury market is exploding?  When making the announcement of the move, the company pointed out that its sales in China had grown 64% year-to-date.  According to General Motors, through August (which would be relevant to the Chinese number in terms of sales reporting) Cadillac sales are down 4.7% year-over-year.
     
  • Soho may be “the epicenter of sophisticated living” now that the artists have been driven out and the chic have moved in, but is Soho or New York City the epicenter of car culture?  Cadillac isn’t selling fine furnishings but cars, and while the denizens of Soho may have Escalades parked in garages for their outings to the Hamptons, chances are when it comes to something on four wheels, for them it is something painted yellow or black.
     
  • As for the “develop attitudes in common with our audience,” again, the question comes down to whether cars are much of a mental consideration.  What’s more, note the word “audience.”  Cadillac doesn’t need an audience.  Cadillac needs customers.

In 1999, Ford formed the Premier Automotive Group (PAG).  It consisted of Aston Martin, Jaguar, Land Rover, Volvo, and Lincoln.  Ford, of course, is headquartered in Dearborn, Michigan.  PAG was headquartered in London.  And the office for the U.S. operations was constructed in Orange County, California, in Irvine.

Lincoln was pulled from PAG in 2002.  Alan Mulally came to Dearborn in 2006, and one by one, the other PAG marques were sold off.

Presumably, London and SoCal weren’t the answer that Ford needed for its premium approach.

Cadillac cars right now are by and large world-class.  Sales are the problem.  A big problem.

But the last thing the executives, marketing people, designers, and whomever else are going to be going to the 212 need to be doing right now is focusing on the color of the drapes and carpet.

Consider this:

Audi sales in the U.S. through September were 130,983 units, a 14.5% increase over the same period last year.

Cadillac sales in the U.S. through September were 127,837 units, a 4.2% decline over the same period in 2013.

Audi is headquartered in Ingolstadt.  That’s in Bavaria.

Ingolstadt is 4,016 miles away from Manhattan.

Seems like you can make some desirable, premium vehicles location notwithstanding.