Cadillac’s other product management disaster – the 1986 Eldorado

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Eldorado

Over its fifty year history, the Cadillac Eldorado was known more its vanity than anything else. It had its debut in 1953–the same year as the Corvette –and was GM’s most glamorous and expensive car. Throughout the 1950s and 1960s, it continued the trend of ‘bigger is better’ and at one point it was more expensive than the Rolls Royce Silver Cloud. At its peak of luxury, some models were actually hand-built in Italy–Cadillac having contracted the assembly to Pininfarina of Italy.

Even throughout the 1970s and early 1980s, the Eldorado managed to thrive and sales rose steadily. But all that changed in 1986 with one of the biggest product management mistakes of all time.

After two very successful years of sales in 1984 and 1985 in which record number of Eldorado models were sold, Cadillac anticipated that it newly redesigned 1986 Eldorado would continue the positive trend. What happened, on the other hand was a disaster that even eclipsed its awful Cimarron debut earlier in the decade.

Here’s what Edmunds.com had to say about the new model:

If sales numbers are the measure of a car’s success, the new 1986 Eldorado was a disaster — a total wipeout. Cadillac sold a stunning 77,401 1985 Eldorados (just 105 cars less than the record 1984 model) yet managed to sell only 21,342 examples of the ’86 model. When 72 percent of a car’s market gets obliterated after a new model is introduced, that’s a misbegotten new model.

Shrunk down more than 16 inches in overall length from the ’85, the ’86 Eldorado was truly a puny Cadillac. It was also clearly a two-door version of the also redesigned Seville, and both cars had awkward-from-every-angle styling. Inside, the interior was tastefully restrained, modern-looking and sterile. It was boxy, it was bland, it was conservative, it was stubby and it fit into parking spaces easily — it was everything buyers didn’t want in an Eldorado.

Things didn’t get any better in 1987 for the Eldorado as sales declined another 17% to just 17,775. How was it that Cadillac could self-implode a car that was one of their flagship models for the past quarter century?

According to Michael J. Lanning, author of Delivering Profitable Value, the problem stemmed from General Motors’ 1970s cost-cutting strategy of combining the different models and different brands into just a few common platforms. Just as the Germans were were enthralling high-end consumers with more sophisticated, less bulky, more efficient, posh, reliable, high-performance sports-touring and luxury cars, GM was making their cars less distinctive.

During the first half of the 1980s, GM extended the strategy by focusing on cost-cutting technology but little was done to achieve the competitive advantage that was really needed.

In 1985 [starting with the 1986 model], the Eldorado had been redesigned to be smaller and more sporty, thus targeting the BMW fans. Motor Trend magazine named the redesigned Cadillac Eldorado ‘worst car of the year.’ The magazine commented on GM’s understanding of Cadillac’s potential customer, ‘The problem with the Eldorado stems from the basic GM credo to be everything to everybody…Longtime Cadillac owners won’t like it. European sports-touring owners won’t bother to look at it. Where’s the market?

In the years following, Eldorado sales never came close to their peak years of 1984 and 1985. Sales averaged about 20,000 cars per year going forward with a peak of 25,000 units sold in 1995. After that, it was all downhill for the flagship Cadillac model. The Eldorado was finally discontinued in 2002 with a paltry 1,600 units produced–Cadillac described the 2002 models as a special “Collector Series” and the cars included touches that were reminiscent of the 1953 model.

Here’s the takeaway: The Cadillac Eldorado may have died in 2002, but the cause of death was from a cancer that took hold because of its disastrous 1986 redesign. As products evolve, product managers need to continuously ask the question: Where’s the market? How has it changed and where will it be tomorrow?

Republished with author's permission from original post.

Patrick Lefler
Patrick Lefler is the founder of The Spruance Group -- a management consultancy that helps growing companies grow faster by providing unique value at the product level: specifically product marketing, pricing, and innovation. He is a former Marine Corps officer; a graduate of both Annapolis and The Wharton School, and has over twenty years of industry expertise.

1 COMMENT

  1. I consider my 1986 Cadillac Eldorado America2 Limited Edition to be among the finest cars ever to wear the Cadillac Crest.

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