Johan de Nysschen has $12 billion to reshape Cadillac image

The executive in charge of resurrecting the General Motors luxury brand has a lot to do after the premium contender lost its edge exactly where it matters – at home in the US.

De Nysschen had a run in the US leading Audi and helped the German brand shape up to be come a real contender (he left for Nissan’s Infiniti a while ago, as Audi soared last year to become the fourth-largest premium brand in the US) on the market, even as Volkswagen’s namesake brand continues to struggle. And he was tasked to make Infiniti into a global powerhouse when GM asked him to run Cadillac – a decision he didn’t take easy, since the brand was unable to lift sales while the market around it boomed. But GM President Dan Ammann gave him the get going: $12 billion for the next half decade, actually more than 25 percent of the total allocated for the entire group as new model expenses. He also split the company and runs it from New York now for more independence.

GM is asking now Cadillac to become the global powerhouse it needs to drive up profits for the next decade or so. Premium models usually have higher earnings margins than mass-market counterparts: they make up around 10 percent of the 100 million autos sold each year worldwide but bring in around 50 percent of the total profits. GM also needs Cadillac because the usually large margins coming from the production of trucks might be soon offset by the rising production costs needed to cope with the tougher fuel economy standards in the US.

Via Bloomberg