Cadillac defect causes GM (NYSE:GM) to call back cars

General Motors (NYSE:GM), an extremely popular and influential name in the field of automobiles, is currently facing huge problems. A problem with the parking brakes was recorded with almost 221,000 of its Cadillac cars. When the results came forward, GM (NYSE:GM) had to recall all of the cars. The main issue was about a specific defect that caused the brakes to swelter; this in turn could cause the entire vehicle to catch fire. A defect that could have resulted in serious injuries, so far has caused no harm to anyone. No matter how small the defect was, it resulted in a greater loss for GM (NYSE:GM), an organization that is trying its best to come to par with other luxury car brand names.

It is not a secret that that General Motors (NYSE:GM) has called back more cars than it has manufactured in the current year, 2014. The number of cars that have been called back for repairs is close to 26 million. This recalling of cars has already caused a lot of financial constraints for GM (NYSE:GM), who has had to pay millions in lawsuit, repair costs and maintenance. The recalling of another 221,000 Cadillac is another stone in an already rippled pond. No matter how fast GM (NYSE:GM) sends back its car in the market after being repaired the company cannot undo the damage it has done to its market reputation and consumer trust.

Cadillac was hoping to compete with Toyota’s (NYSE:TM) Lexus brand, Audi, BMW and Mercedes; few of the most prominent brands when it comes to high maintained luxury cars. Toyota, Audi, BMW and Mercedes have a niche of their own and for three decades now they have held their ground with full strength and stability. Cadillac is slowly making its own place among the old luxury cars and aged brand names. People who now want to own a Cadillac are mostly elderly and want this car as a part of their antique collection of old brand names.

This recall incident and many other reasons in the past few years have caused the downfall in Cadillac sales. The company has taken steps by introducing new models like the ATS, but that hasn’t done much. There has been an 18% decline in the sales of the Cadillac since last year and it is predicted that this down fall will continue. Despite this low, GM (NYSE:GM) is still hopeful that it will be able to capture the market once again when new models get introduce. GM (NYSE:GM) still has to compete with the four giants that come out with the latest and improved models each year.

Johan de Nysschen was recently made head of the Cadillac division – a strange choice since he was the former head of Nissan’s concerned Infiniti allotment, which in no way does any credit to his resume and reputation. It will be interesting to see how Johan does for GM (NYSE:GM) and whether he can create a better future for Cadillac.