Back in April, we reported on relatively high incentives for the Cadillac ATS, which were discovered in the midst of some fact-checking on a blatant puff piece on the brand by Bloomberg. Months later, none other than Automotive News has caught on, with their own story about the baby Cadillac’s high pricing and the resulting incentives being offered.
To avoid the inevitable fan boy cries of “bias”, here’s the take directly from Automotive News
When General Motors launched the Cadillac ATS nearly a year ago, executives sent a bold message by pricing the newcomer in the same territory as BMW’s 3 series, long the compact-luxury segment’s top seller.
But at the dealership, the ATS hasn’t commanded 3-series prices, research data show. Through the first six months of the year, the average transaction price on the ATS was $39,459, vs. $44,764 for the 3 series, according to Edmunds.com. The ATS had heavier incentives, too: $4,088 per unit, vs. $3,555 for the 3 series.
One explanation seems to stem from Cadillac’s distribution strategy, which, we learned, involved sending units to key markets in wealthy ZIP codes where Cadillac is looking for growth. But these locales (places like Miami, wealthy areas of California etc) tend to favor import luxury brands rather than Cadillac, and sales are, according to our source, not meeting internal projections. This explains inventory levels, which have been consistently above 100 days of supply since we last checked in (there’s currently a 122 day supply of ATS’ right now).
Given the multi-decade timeline it takes to rebuild a brand, it will take Cadillac some time to pull themselves up, and good product is the first step of a long journey. However, these are the facts – there are significant rebates and inventory levels are high on a car that had outsized expectations. And it took months for mainstream outlets to notice what we did.