General Motors announced that it is splitting Cadillac into a separate business unit and will be moving the division's headquarters from Detroit, Michigan to New York's SoHo neighborhood.
According to executives, moving Cadillac's headquarters to New York may allow the brand to do away with its dull image and recover the prestige that it once had almost two decades ago.
The new president of Cadillac, Johan de Nysschen, transferred to the position from Nissan's Infiniti division. He said that before accepting the offer to become Cadillac's president, de Nysschen discussed the move from Detroit to New York with the top executives of General Motors.
De Nysschen believed that for Cadillac to recover, the brand needed to move to New York to become more autonomous and to have a better connection to what is "cool and fashionable."
"If we stayed where we've been, nothing would change," he said in an interview.
De Nysschen believes that Cadillac should move away, both geographically and figuratively, from the lower-tier brands of General Motors that he thinks have pulled down Cadillac's image.
However, industry experts are saying that the pending transfer is a risky move for Cadillac, with some wondering if the brand could still turn its fortunes around amid intense competition from luxury car makers from Germany such as Mercedes Benz and BMW.
Skepticism is also running that Cadillac will not be able to improve its image through simply moving its headquarters. Experts are saying that the brand should improve the quality and style of its products through the expansion of a strong and limited lineup of vehicles. Most importantly, the perceptions of the customers on the brand must change.
De Nysschen admitted that it may take a long amount of time for Cadillac to re-establish itself as a luxury brand.
"It could be 10 years in the making before we will see a significant leap forward," he said.
Last year, Mercedes Benz sold 334,344 luxury cars in the United States, while BMW sold 309,280 cars. Cadillac, in comparison, sold only 182,543.
Cadillac is setting a goal of 500,000 units sold by 2020, which is a very ambitious target. The brand will have to heavily increase its business in Asia, especially in China where the luxury car market is steadily growing.
De Nysschen's statements regarding the transfer to New York from Detroit, however, have Detroiters in uproar as the city's characteristics are severely downplayed.
"Establishing our new global headquarters in Soho places Cadillac at the center of sophisticated living," said De Nysschen in one of the several statements made regarding the comparison between the two cities.
