Re: 2nd Round: How the Luxury Market Dominance was Lost

Posted by Mr.Pushbutton  On 2008/12/22 16:21:40

Steve, GM was loosing so much money on Cadillac in the depression that they discussed dropping the brand all together. One move that saved the brand was the decision to offer (for the first time) the purchase of Cadillacs through GMAC rather than the Chattel mortgage (which was how luxury cars were financed prior to the war) and making GMAC financing available to middle class and professional African Americans, who were a very small but slowly growing market segment. Prior to this the luxury car makers sort of limited who could buy their offerings by the method of finance; the chattel mortgage was available only to those with the background of financial dealings that identified them as "a person of substance."
After the war the big three were delighted in the unheard-of volume their luxury brands were achieving, and the profits from same. Any thoughts of "qualifying" customers were abandoned and GM and Ford delighted in the success and profits from Cadillac and Lincoln. In a way this led to the "welfare Cadillac" thing, which over time cheapened the image of the brands to those who like owning something exclusive, these days Mercedes and Lexus seems to be meeting that need in mass, more exotic and costly product for those above those brands.
Your analysis of the Cadillac model offerings is spot on to my eyes, it is a case where GM ran a tighter ship for that moment in history and know how to take advantage of an opening when given one. The elimination of the LaSalle and Buick 90 series set Cadillac up for success.