2nd Round: How the Luxury Market Dominance was Lost

Posted by 58L8134 On 2008/12/22 14:34:47

Hi
After reading the pertinent posting to my questions, here I offer my opinion.

Historical Framework: the Single Six developed into the standard mass-market volume prestige car for the 1920's, brought Packard's prestige to a market segment previously priced out of luxury cars. Single Six and successor Standard Eight accounted for approximately 85% of the yearly production.

The Single Six and Standard Eight enlarged Packard's prestige reputation by directly exposing more of the population to the quality and qualities Packard possessed.

The Depression changed everything, forced Packard to offer cars in the middle price segment to survive.

Tooling cost for all-steel bodies only could be amortized by volume, difficult for small manufacturers.

Selling in volume traded on Packard's prestige name.

Ultimately, the 120 and Six sales volume saved the company financially, allowed it to weather the Depression.

GM production people make the 120 a successful reality, only understood volume production, pushed the 115 six to further their only understanding of how to make Packard a continuing success.

The old-line management, wary from the troubled Depression economy, are comforted by profits of medium priced sales, lose sight of Packard's long-term strength in luxury cars.

Management failed to recognize how the luxury market will eventually revive: not on the same basis as the 1920's, not with the luxury cars then in production.

Depression economics caused major deflation and price realignment for all segments. GM was astute enough to recognize this situation. The mass market volume luxury car segment, which had been priced $2,100 to $3,000 in the 1920's, by 1936 spread from $1,500 to $2,100.

Beginnings of the redefined mass-market volume luxury car: the '36 Cadillac Series 60. An inauspicious beginning, essentially a Buick Century fitted with a Cadillac V8 and trim.

Price is the important point: $1,695, the middle of the nearly $1,300 price gap between the 120 sedan at $1,115 and Eight at $2,385. Sales of 6712 units seem insignificant, but each succeeding year sales mostly move in the right direction.

For '37, influenced by the GM production people, Packard management introduces the 115 six in a further effort to generate sales volume. Concurrently, the specifications of the former Eight become the new Super Eight, dismissing the big straight eight to history.

The boost for the Cadillac Series 60 comes in '38 with the introduction of the 60 Special. More importantly, other than the 120CD and '38 Eight Deluxe price nearer the Series 60, Packard offers no models truly competitive until the '39 Super 8.

When the '39 Super 8 arrives, Packard has clearly based it on the '38 Eight, with larger engine and finer trim. This parallels Cadillac's approach three years prior in creating the Series 60. At the end of that fateful year, the new Super 8 garners 3962 sales versus 11,426 Cadillac 61 and 60 Specials, the first point of loss.

This is the critical point where the senior series seriously needed retooling to remain a contender to dominate this market. But rather than design a new car, with the high style becoming expected, Packard presented just an up-market version of the 120/Eight, now so ubiquitous.

For three model years, Cadillac built a base of customers with the Series 60, next enlarged the series with the stylish 60 Special. That single model sets the style for the next stage of Cadillac's conquest of the volume luxury market, the Series 62 with the GM Torpedo C Body.

Final steps to make the conquest complete for 1941: end the LaSalle nameplate now clearly siphoning sales from Cadillac, reinstitute the Series 61 as the entry level Cadillac, then reduce the base prices of the Series 62 by 12%, just watch the sales explode.

Packard's management, enthralled with the price range crowded with many other good medium priced offering, ignored until it was too late a lucrative market just waiting to be filled.

I look forward to your comments and perspectives now you've read mine.

Steve