De Nysschen Back Tracks As Cadillac CTS Gets $3,000 Price Cut
“That’s not going to happen…Either you have to bring your volume aspirations into alignment with reality and accept that you will sell fewer cars. Or you have to drop the price and continue to transact at the prices where you were historically. I think the logical conclusion is that it’s better to build off a very solid base in terms of [product] credibility, charge a fair price for the car and realize you have to wait until the volume comes.”
That quote was from Cadillac boss John De Nysschen in response to questions about cutting the prices of Cadillac models, which some dealers complained has risen too quickly. How quickly that’s changed.
Automotive News reports that the 2015 Cadillac CTS models with a V6 engine will get a $3,000 price cut. Select models equipped with a 4-cylinder engine will get a $2,000 cut. The base price of $46,340 remains unchanged, while the top trim V-Sport with a twin turbo V6 engine will stay at $71,880.
A Cadillac memo described the move as “a more compelling price point for our returning CTS loyalists when moving up into a new, more sophisticated 2015 CTS.” I nventories of the CTS remained bloated through much of the year, with many Cadillac dealers complaining that prices of the CTS had risen sharply, alienating existing customers. Despite a brand new model, CTS sales were down 4 percent year over year in 2014.
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There's something terribly wrong with the comment system-longer replies don't seem to show up but new comments will post. This was supposed to be a reply to APaGttH but replies seem to go into a black hole: The $50K Genesis actually just proves how overpriced the CTS is, since the equivalent CTS is $65K (V6 Premium AWD). The thing about that $80K 4 cylinder 5 series is that: 1)BMW is the #1 brand in this segment so they can charge to match demand. 2)While the MSRP may be $80K nobody except a few fanatics actually ever pay that since most BMWs are "sold" as leases with heavy factory subsidies/incentives. When you look at lease rates, which is how most of these cars are sold, that same BMW 5 series with the inflated $80K MSRP is suddenly price competitive with a similarly equipped CTS-except you can tell all your neighbors that you drive an "$80K BMW" instead of a Cadillac CTS. Cadillac just does NOT have enough brand reputation to be able to demand high prices regardless of how few sales they have-all that'll happen is that nobody will buy them, so there will be no word of mouth even if your product is good. Even worse, the residuals will become even worse which will penalize anybody who bought one, and make leases expensive compared to the competition. This kind of nonsense where Cadillac will set a high price no matter how few sales is a joke business plan for the car industry where huge fixed costs are a big deal-it's a great way to destroy Cadillac entirely. If they really want to be where BMW is today they need to do what all up and coming brands do-offer a lot more value by loading up the cars but still charge a relatively high average transaction price and building them with better quality than the cars you're trying to compete against. And then when you have the demand you can raise your prices. This ridiculous plan to try and do it backwards is going to destroy Cadillac. CTS sales already dropped in a brand new model year and this pathetic $2K price drop isn't even close to what it'd actually take to move these. A similarly equipped CTS and BMW 528i lease for $449 and $489 respectively with $4349 and $4214 up front. I tried to compare 528xi rates with the equivalent AWD CTS but Cadillac doesn't even publish a public special offer for that car so for all we know the BMW might be cheaper. The 528i in question has an MSRP of $52,700.00 while the CTS in question has an MSRP of $45,345.36 so while the BMW "costs over $7000 more" in the real world the lease is only $40 more and you pay $100 less up front to start with (obviously you can negotiate with both Cadillac and BMW dealers but I'm just going off the current public offer)
If we want to look at the whole "truth about cars" though, I don't think saying CTS sales were down means very much, since the market is still buying SUV's and skipping passenger cars. BMW 5 series sales were down 7% and MB E-class were down 5%. Those brands are both up overall, but they're doing it with crossover iron. Bring out the pitchforks. http://www.goodcarbadcar.net/2015/01/usa-all-cars-sales-figures-2014-december-year-end.html
Cadillac is missing out on what makes it Cadillac. Go back to crisper styling like previous generations of a and s and drop the xts, its a rolling abomination. The volt thingy should go too and everyone involved on pushing that project should be fired. Keep escalade, build roomier ats and CTS models, update the srx, come out with a small cross over, and come out with a true flagship sedan, build it on the escalade frame and make it a hybrid so it meets minimum mpg standards. The bof sedan can have short, long wheel base, and limo versions. It WILL sell, as there is no longer a town car to compete against but there is still a need for such vehicles.
I legitimately liked the CTS V6 Premium, that is an excellent car when I drove it and very good looking. The problem is the CTS price is too high compared to its competitors which have more prestige, the backseat and interior in general are woefully small and the American car dealership experience is awful, even Cadillac, and usually not pleasant at all. At the end of the day I just don't think Ford or GM are very good companies or very well run companies and you don't get that premium experience from them.