General Motors' (GM) Cadillac division has been running test drives this month to journalists and reviewers of its new flagship CT6, a sedan meant to bring GM's luxury division closer to parity with German and Japanese rivals when it goes on sale in March. 

Comparable in size to Mercedes-Benz S Class, BMW 7 Series, Audi A8 and Lexus LS460, the rear-wheel-drive CT6 may help Cadillac attract shoppers who regarded its vehicles as a step below the world's most prestigious automotive brands. A mockup of CT6 was first shown publicly in the U.S. last April at the New York auto show.

Reviews of the car will begin appearing on Jan. 26, the date before which coverage of driving impressions is embargoed.

For GM, achieving top-scale luxury status could translate into higher transaction prices on all Cadillac models, starting with the ATS, which is the size of a BMW 3 series, one of its smaller models. (Ford (F) is likewise introducing improved models of its Lincoln brand in a bid to close the gap with top-tier luxury producers). 

GM currently books a disproportionate amount of corporate profit from pickup truck sales in the U.S. and is striving to create more financial balance in its business by improving earnings on cars. 

CT6 also could move GM closer to elevating Cadillac, like its German rivals, into an authentic global brand. Production of the new vehicle begins simultaneously in Detroit and Shanghai, where status-conscious shoppers in the fast-growing China market, possibly buying their first car, are particular targets for GM.

"Products like the CT6 will give us an opportunity to continue to expand our customer base and continue to increase share," Matt Tsien, president of GM China, told The Wall Street Journal.

At a test drive event in Ramona, Calif., Johan De Nysschen, the head of Cadillac, said the automaker had made "great strides" bringing GM production of Cadillac vehicles into line with demand. Consequently, transaction prices on cars have risen and discounts have fallen.

"It's taken a while but with the CT6 we've brought Cadillac back to the top, to that segment we used to own -- the large, sophisticated and refined pinnacle luxury sedan," he said. Sporty driving performance sets the CT6 apart, he said, which is defined by light weight -- a thousand pounds lighter than Mercedes-Benz S Class -- and a new 3.0-liter V6 twin-turbo engine. A new twin-turbo V8 is in development, he said.

De Nysschen noted that light weight and sporty handling have been achieved by using a "mixed material approach" that uses high-tensile steel, aluminum and titanium for the body. GM employed a new manufacturing technique to bond different metals to one another, he said, creating an architecture that is light, stiff and resistant to noise.

"We've learned that the rules of the luxury market require something different, not to be talking first about the deal," the price and discount, he said. In the past year, bringing production and vehicle inventory into line with demand has raised the transaction prices on Cadillacs, partly due to richer model mix, by $7,500.

Sales of Cadillac last year rose 2.6% to 175,267 vehicles. The top luxury brand in the U.S., Mercedes-Benz, sold 372,977, an increase of 4.7%, according to Kelley Blue Book.

 

 

 

 

 

Doron Levin is the host of "In the Driver Seat," broadcast on SiriusXM Insight 121, Saturday at noon, encore Sunday at 9 a.m.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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