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WILL LEXUS RUN RINGS AROUND CADDY'S NEW BABY?Cadillac execs in Detroit were looking for an import stopper--a luxury sedan that would appeal to American baby boomers hooked on sleek foreign models. The influx of new buyers would also help ease Cadillac's dependence on the aging owners of the company's main model, the Deville. So they gussied up an Opel Omega from parent General Motors Corp.'s European subsidiary, showed it off at auto shows for a couple of years, and launched it last fall with a quirky ad campaign as the Catera, the Caddy that zigs. Catera never got much of a honeymoon. Last October, Toyota Motor Corp. introduced a redesigned version of its entry-level luxury sedan, the industry-leading Lexus ES 300. To make life even more difficult for the likes of Cadillac, the Japanese carmaker cut $2,500 off the sticker price. At $30,395, the ES 300 undercut the Catera by $240. By the end of January, Lexus was selling more ES 300s a month than Cadillac had sold Cateras since its launch. STALLED. To be sure, the ES 300 is an established brand, while Cadillac is starting from scratch with the Catera. And Cadillac is continuing to sharpen its marketing skills. It quickly dumped a commercial shown during the Super Bowl featuring model Cindy Crawford in a leather miniskirt that irked some of the professional women Catera was trying to attract. And in response to dealer demands, Cadillac began running print ads comparing Catera's price and features to rival offerings, including the ES 300. In another nod to its dealers, Cadillac in late January added a factory-sponsored lease program that cut monthly payments on a Catera from $452 to $399. That amounts to a subsidy of $4,100 per car, says Arthur M. Spinella, vice-president of CNW Marketing/Research Inc. in Bandon, Ore. Rivals say such a deep rebate on a four-month old car is a sign of desperation. But GM executives insist the new lease simply matches deals they say some Lexus dealers are offering on the ES 300. In any event, Catera sales in February jumped to 2,232 cars. Still, Lexus sold 4,126. While the leasing program is helping, Cadillac must also assure buyers that the Catera is here to stay. In an attitude study among people in the market for near-luxury cars, CNW Marketing/Research found that most of them were skeptical that Cadillac would stand behind the Catera for long. The feeling stems from Cadillac's reputation for promoting cars at auto shows and then abandoning them, and for products, such as the Allante convertible that are introduced and then disappear. Says Spinella: ''No one wants to be stuck driving an orphan.'' One bittersweet advantage for Catera: Toyota can't build ES 300s fast enough to meet customer cravings for them. Sales have been running 20% higher than Toyota expected, so dealers have only a five-day supply, compared with 66 days for the Catera. Toyota will try to remedy that later this year by building the ES 300 in its Kyushu factory as well as in Toyota City. Meanwhile, instead of waiting, some would-be ES 300 buyers are defecting to the Catera. ''If we can't get them an ES 300 in a reasonable time, rather than lose a customer, we'll show them the Catera,'' says Kenneth Greene, general manager of Silver Star Motor Car Co., a dealership in Thousand Oaks, Calif., that has both Lexus and Cadillac franchises. ''And some who have looked at the Catera have bought one.'' For the newest Caddy, every little bit helps.
By Larry Armstrong in Los Angeles, with Kathleen Kerwin in Detroit
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Updated June 15, 1997 by bwwebmaster
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