General Motors to Create a Separate Cadillac Business Unit


General Motors Co. (GM) announced that it will establish its Cadillac brand as a separate business unit. The automaker also revealed plans to extend the new Cadillac organization to New York and open its new global headquarter in 2015.

Setting up Cadillac as an individual business unit will help General Motors capitalize on opportunities in the luxury automotive market and expand the brand’s presence outside North America. The splitting of the Cadillac unit along with the initiative to launch a range of new Cadillac products is likely to help the company achieve global growth.

General Motors has plans to expand the Cadillac brand into a multi-purpose one. It will establish the Headquarter in the heart of a city, in the trendy Soho neighborhood of Manhattan, which is famous for establishing trends and setting standards for the global luxury market. The company believes that New York will provide the right boost to the Cadillac brand and enhance its performance significantly. Though majority of the functions will be executed in the new global headquarters, the technical product development and manufacturing assembly operations will not undergo any change.

Currently, Cadillac operates in more than 40 countries. A string of product launches has helped the brand grow. The brand harnessed 28% global growth in 2013. Its year to date sales in China has improved 75%.

Under the new settings, Johan de Nysschen will take care of the brand’s overall operational performance. Cadillac’s leadership council will be headed by de Nysschen, along with Jim Bunnell as the vice president of sales and service, Uwe Ellinghaus as the chief marketing officer, David Colasinski as chief financial officer, David Leone as executive chief engineer, and Andrew Smith as executive director of design.

General Motors currently carries a Zacks Rank #3 (Hold). Better-ranked automobile stocks worth considering include Tesla Motors, Inc. (TSLA), China Automotive Systems Inc. (CAAS) and Fox Factory Holding Corp (FOXF). While Tesla and China Automotive Systems sport a Zacks Rank #1 (Strong Buy), Fox Factory carries a Zacks Rank #2 (Buy).

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