TTAC readers looking for a more pro-GM news source may want to check out Bloomberg for their next dose of pro-GM news. A story on Cadillac’s revived fortunes contains all kinds of enthusiastic copy and positive quotes, but still manages to bury the lede way down at the bottom of the story.

Take this quote for example

“Cadillac’s performance certainly exceeded expectations, and the ATS was the driving factor,” said Jeff Schuster, auto analyst with LMC Automotive in Troy, Michigan. “They have a lot happening with their lineup and the vehicles are hitting with consumers.”

Joel Ewanick himself couldn’t have come up with a better quote to feed to the industry price. The ATS is a nice car by all accounts. First drive impressions were positive, despite one of the buff books binning one into the red Georgia clay. But scroll a little further down past the ongoing textual fellatio and you’ll find the golden nugget.

Cadillac’s pricing problems show up in the incentives it offers. GM’s average incentive spending on the ATS in February was $3,700 per car, compared to $333 in September, when the new model went on sale, according to TrueCar Inc., a Santa Monica, California, researcher that tracks auto sales.

Uh oh. $3,700 just months after their crucial entry-level car was introduced? A nearly tenfold increase in incentive spending in just a few short months? Not good news at all. The incentives do explain why the ATS had a nice bump in sales right around February. It’s unfortunate that GM would have to spend so much per car to move a product as nice as the ATS.

Of course, Bloomberg handily explains away the unpleasant incentive information with this quote

Those discounts should decline as Cadillac’s redesigned models attract new buyers. GM said more than half the ATS buyers are coming from competitors such as BMW, Mercedes and Lexus. GM aims to increase sales of Cadillac in the U.S. by more than 30 percent this year, Bob Ferguson, global head of the brand, told reporters in New York last week. 

A look at incentive programs in the Miami/South Florida region (using ZIP Code 33180) as a sample shows that the ATS offering more aggressive incentive programs than its competitors. BMW is offering 3.1 percent APR financing for the new 3-Series (save for the Hybrid at 1.9 percent) versus 0 percent for the ATS. Audi offers no finance incentives for the A4 at all. While the ATS gets a $299/month lease for 36 months with $2,199 due at signing, a similarly equipped 328i would cost $349/month for 36 months with $3,824 due at signing. An A4 2.0T can be leased for $309/month for the same term with $3,719 due. Mercedes-Benz was not offering 36 month lease deals at the time of writing. Only Lexus came close to matching Cadillac’s offer, with a lease on an IS250 involving $309/month payment for 36 months, with $3,209 due at signing and a credit for the first month’s lease payment – on a model that is due to be replaced any day now, where dealers are desperate to get rid of the stock.

The incentive picture makes the Q1 2013 sales snapshot above even starker. The 3-Series and C-Class are way out in front. The C-Class is leading the segment with 22,912 units sold, with the 3-Series in second place with 20,662 units. Cadillac is in third place, but is beating the A4 by just 45 units as of the end of March (9795 units of the ATS sold versus 9750 A4s). The Lexus trails in fifth place with 5173.

The unfortunate thing here is that the ATS itself isn’t necessarily the reason for its lagging sales and heavy incentive spending. Rather it’s the result of the continued degradation of the Cadillac brand in the eyes of the consumer over the past few decades. I’m far from the only person that believes the ATS to be a superior product to the Mercedes-Benz C-Class, and there are plenty of knowledgeable  respected auto critics who feel that is is just as dynamically competent as the BMW 3-Series. But these two products are crushing the ATS in the sales race, undoubtedly on the strength of their respective brands. The unfortunate relaity is that most consumers don’t care about whether or not their car is The Ultimate Driving Machine; they just want a fancy badge to show off to other people. Until Cadillac’s brand is on par with the Roundel or the Three Pointed Star, this scenario of significant incentive spending and lagging sales will likely continue to play out, no matter how good the product is.

People form lasting impressions at an early age. This might explain why, among the general population over 35, neither Audi nor BMW can match the mystique of a Mercedes. Even the bottom-of-the-US-range C300 raises eyebrows from people who’ll give an Audi A7 nary a passing glance (and who’d view spending an extra $8,000 for a hatchback as lunacy). But will this continue to be the case with subsequent generations, or will Mercedes follow in the footsteps of Cadillac? A brand is only as strong as its weakest link. Does the C300 justify the cachet attached to its three-pointed star?

The previous C-Class, the W203, was a prettier car. But it was also a plainer one. The W204, with its squarer cut, crisper creases, and more complicated graphics, has considerably more road presence and, of at least equal importance, looks more expensive. Most important of all: it’s widely recognizable as a Mercedes-Benz. Proof, in case you need it, that Mercedes retains latitude to break with current convention: a standing hood ornament. A Cadillac that attempted the same would be dismissed as hopelessly out-of-touch.

The interior similarly won’t win any beauty contests but through the sophistication and sheer quantity of details sufficiently suggests you’re not in a mainstream car. Materials were upgraded with this year’s refresh, and generally avoid any charges of seeming cheap (though the HVAC dials could feel more solid). Leather seating is increasingly rare on Mercedes-Benz lots, and you won’t find it inside this $43,980 specimen. But people are prone to assumptions, and the MB-Tex vinyl is hard to distinguish from the standard grade, heavily processed leather. How many people have owned a Mercedes without ever realizing that their upholstery was petroleum-based?

In an attempt to minimize the number of buttons by pairing a console-mounted knob with a multifunctional display, BMW has iDrive, Audi has MMI, and Mercedes has COMAND. That latter is neither as sophisticated nor as easy to use as the latest iterations of the others, but as with all such systems, you’ll eventually sort it out. Or not. More of a bother: Mercedes doggedly continues to position the cruise control lever where other manufacturers position the turn signal (the stalk is mounted just  little lower.) Even towards the end of my week in the car I unintentionally activated the system multiple times per day. Also in need of tweaking: power seat adjustments that react too quickly for frustration-free fine-tuning.

A more positive sign that you’re in a Mercedes: the doors latch closed with a solid mechanical thunk. Though considerable engineering hours were expended refining this sound, the car comes by it honestly. The C300’s body structure oozes rock-hard solidity. Crash tests back up this impression. In a 35 mph frontal offset crash test, the structure deforms by only one to three centimeters. The side impact structural deformation figures are even more impressive. (Note: Lower numbers are better in these stats.) Mercedes are arguably unworthy of their reputation in some ways, but safety isn’t one of them.

The driving position in the C300 could hardly be better, with a more open view forward than you’ll find from behind the BMW 3-Series’s more imposing instrument panel. (My suspicion: Cadillac studied the C-Class very closely when designing the architecture for the new Cadillac ATS.) Opinions vary about Mercedes-Benz’s traditional sehr flach, sehr fest Sitze. Some people will find them properly supportive for hours. Others will simply find them flat and hard. Count me among the latter group, perhaps because I took no long trips in the car. Thankfully the seatback curves more than the bottom cushion, and so provides decent lateral support. Typical of the segment, the rear seat will accommodate adults in a pinch. A little more toe room under the front seats would go a long way. For long distance room and comfort you’ll want to step up to the E-Class or even the S-Class.

The C300 4Matic’s specs aren’t promising. While the V6s in mainstream midsize sedans start at 3.5 liters, that in the Mercedes is a mere 3.0. The mill’s 228 horsepower (at 6,000 rpm) and 221 pound feet of torque (from 2,750 to 5,000) must contend with 3,737 pounds of curb weight. And yet, through whatever magic that made the 1990s S300 viable, acceleration feels more than adequate even right off the line, and spirited with a heavy foot north of 4,000 rpm. The seven-speed automatic isn’t the quickest or slickest, but the right ratio is always in there somewhere. Two modes are provided, E and S. I could detect no difference between them. Though much has changed over the decades, the engine note retains traces of Mercedes’ traditional mechanical thrum—it doesn’t sound like any old six.

All-wheel drive is exclusively available on the C300 and no rear-drive option exists. The rear-wheel-drive C-Class is offered with either a 201-horsepower, 229-pound-feet turbocharged 1.8-liter four-cylinder or a 302-horsepower 3.5-liter V6. Though the latter is no doubt a strong performer, few dealers stock it. If even the 3.5 isn’t strong enough for you, there’s also the AMG C63 with a 451-horsepower V8.

The argument against the six: fuel economy. A larger, heavier, and more powerful BMW 528i xDrive manages EPA ratings of 22 city, 32 highway. The next 3-Series xDrive should do even better. An Audi A4 quattro: 21/29. And the 333-horsepower Audi S4: 18/28. The C300 4Matic: only 18 city, 25 highway. The trip computer backed up these subpar numbers, reporting about 20 in suburban driving. The C300’s six might punch above its specs, but this comes at a price.

The C300 is available in both Sport and Luxury trims. I’ve steered people towards the former over the years, as it adds a body kit and more athletic suspension tuning at a very un-German price: free. Scratch that: this year the better looking, better handling C-Class variant actually costs a little less. For their own reasons (that I cannot fathom) Mercedes provided the latter. Even in Luxury trim the suspension is firm enough to remain composed in enthusiastic driving—and to fidget on some roads, despite shocks that allegedly adapt to road conditions. Power is shunted to the front wheels only when the rears slip, and even then the torque split is 45/55, so the feel remains that of a rear-wheel-drive car—complete with tail-out oversteer on slick surfaces. (Don’t worry, the apparently undefeatable stability control will intervene.)

The biggest problem, in either trim: light steering that feels numb even compared to others I’ve described as numb. As in the current E-Class, the steering wheel conveys virtually nothing about the direction the front wheels are pointed or the degree to which they’re slipping. As a result there’s little joy—and even less confidence—in exercising the capable chassis.

Don’t care to exercise the chassis? Simply want to quickly consume mile after mile of concrete slab stretching straight as far as the eye can see, and beyond? Then the Mercedes is in its element and performs admirably. The C300 isn’t silent as a tomb inside, but low quality noises are filtered out. Should you become drowsy, a standard system will detect this and do its best to wake you up.

The tested car listed for $43,980, including $1,515 for sparkly white paint (another sign that Mercedes was trying to handicap the car). A different metallic shade will set you back only $720. Don’t need the embrace of a telematics system? Then you can shave another $660, bringing the sticker down to $42,525. For fancy features like nav, xenons, and passive entry you’ll have to tick more boxes. Seem steep? Well, a similarly-equipped four-cylinder Audi A4 is only about $1,000 less, a much smaller difference than in past decades. While Mercedes still has a sizable edge in cachet among the masses, they’re no longer trying to charge more for it.

And costs down the road? While some Mercedes remain notoriously unreliable (e.g. the SUVs), the C-Class isn’t among them. The W204 C-Class consistently has been about average, based on responses to TrueDelta’s Car Reliability Survey.

Mercedes-Benz’s image isn’t entirely in its favor. As with Cadillac in the past, many people who could afford a Mercedes—and who do buy similarly-priced competitors—simply cannot picture themselves in one. If these people got over their preconceptions and took the C300 for a drive they’d find…a car with a very solid structure, but little else to separate it from the crowd. The seats might prove supportive on long drives, but around town they just feel hard. The 3.0-liter V6 feels like a larger engine, but will also drink some much more powerful engines under the table. The chassis is sure-footed, but the steering is disconcertingly numb. The electronics are sophisticated, but the same can be said of German competitors. We’re back to that solid structure and safety. Seeking a rolling bank vault with tidy dimensions? Then the C300 is your car. But is this enough, when even Volvo feels the need to talk naughty?

Mercedes-Benz provided the car with insurance and a tank of gas.

Michael Karesh operates TrueDelta.com, an online provider of car reliability and real-world fuel economy information.

Steven writes:

Sajeev and Steve,

I have a 2001 Volvo XC wagon, that has about 175 k on it, the car is in pretty good shape, had the tranny replaced before I got it, I have put about 4k in since Jan, the real problem is it gets about 22 MPG with 90% highway, all wheel drive and Turbo=bad gas mileage, I drive about 40,000 miles a year and betwen the gas and the upkeep I am getting killed, hence time for a new car.

This is what I want, good to great on gas,auto, 4dr or wagon  safe and comfy on the road, no suv, no RWD,( drive from NY to Boston year round, I am in sales so it needs to be somewhat presentable.  No americian cars, sorry no faith that they will hold up in the long run, and need some soul (hence no Camry) since I live in the car, budget anywhere from 15k to 30 k, I would perfer used but with prices this high not sure if it makes sense, I like Saabs, Audi,Acura, had a bunch of Accords but not since 2006. Lately have been very tempted by a 2011 VW Jetta TDI, great MPG but VW does not have a great rep. It seems VW TDI hold their value very well so that is why I am considering a 2011, love Saabs bc they do not hold their value so a great used buy ( had 2 in the past) I need some quick help from you and the board, before the volvo needs another $1500 in repairs/ maintance. thanks

Sajeev answers:

I’d definitely gravitate to a new vehicle, given your budget, career and high prices of lightly used vehicles. Which pushes me (you) to the mainstream sedans that you might hate. You need to test drive a bunch of them to see what really speaks to you: important for someone in your line of work.

Okay, so no Camry, but you should at least drive the SE model. Ditto any Ford Fusion, Chevy Malibu: I know, I know! The Accord is also worth a look, but I am gonna recommend two sweethearts in this class: the Hyundai Sonata (SE or Limited) and the Mazda 6. Both are rather cool for their class, and the Hyundai has a great warranty (with roadside assistance) for a road warrior.

Steve answers:

I wouldn’t throw out the Camry with the bathwater just yet. Last Tuesday I test drove all the new Camrys and found the Hybrid model to be the absolute embodiment of everything you likely want. Plenty of power and comfort. Exceptional fuel economy (43 city, 39 highway). Surprisingly tight handling and ‘healthy’ road feel in what is supposedly a traditional conservative car.

I would put that model near the top regardless of the bulbous marshmallow nature of the outgoing generation.

The rest of the results are pretty much in line with what Sajeev suggests. On the new side there is the Fusion, Sonata, 6, and Altima. On the used side it depends on whether you’re willing to consider any unpopular cars. Yes, SAABs are cheap now. So is the Infiniti G25 which is one of many near luxury sedans that fall through the cracks due mostly to ‘spec junkies’ wanting the more powerful model.

If you’re willing to consider a 1 to 2 year old CPO car that offers a fantastic warranty, I would opt for a step up. The C-Class, Audi A4, and Infiniti G25 would be on my list as well. Although to be frank, I would likely just go with the new Camry Hybrid if I had to drive all those miles in the pothole marred northeast. Good luck!

Need help with a car buying conundrum? Email your particulars to sajeev@thetruthaboutcars.com , and let TTAC’s collective wisdom make the decision easier… or possibly much, much harder.

Mercedes-Benz continues its long march forward in China. In February, “Benz” (as the locals call the brand here) racked in a 160 percent growth. 7,200 additional Benzes graced China’s roads by end of February.

With more than 15,300 units sold in the first two months of the year, up 155 percent, Mercedes-Benz calls itself the fastest-growing luxury brand in China, Gasgoo reports.

Imports of the S-Class grew by 115 percent in February, cementing China as the world’s biggest S-Class market. The new generation S-Class is extremely popular amongst China’s well-to-do.

The all-new E-Class became Mercedes-Benz’s top-selling model in China last month, with total sales nearing 4,000 units for the first two months. The E-Class used to be locally made. Currently, it is imported until Daimler’s joint venture partner BAIC has updated their production. A long series, a favorite in China, where everybody who’s somebody leaves the driving to a driver, will be part of the E-Class lineup once production resumes in China.

The locally produced C-Class sold 1,400 sedans.

Daimler said its global sales were up 8.9 percent year on year in February to 78,700 cars, with China providing a good deal of the growth.