Ballooning U.S. Cadillac Transaction Prices Hide a Not-so-silver Lining
In 2017, the average U.S. Cadillac buyer walked out of the dealership after signing over $54,488 for a new vehicle. That’s almost $6,000 more than the average sticker in the luxury field, placing Cadillac among the upper echelon of premium cars.
However, the brand’s skyrocketing average transaction price — up 25 percent over the past five years — comes as the brand weathers a sales downturn in the U.S. market. That lofty 2017 figure has plenty to do with the models customers aren’t buying.
It’s starkly clear that 2017 was a terrible year for traditional cars, and not just at Cadillac. The public’s rapid, ongoing shift to crossovers and SUVs meant 2017 sales of Cadillac’s lesser offerings — the ATS, CTS, and XTS sedans — declined by the order of 39.1 percent, 35 percent, and 26.6 percent, respectively.
Overall, the brand shed 8 percent of its volume last year. Those sales were 14.3 percent lower than 2013, Cadillac’s best post-recession year.
As fewer buyers took home a relatively low-buck ATS, volume of the high-zoot Escalade and long-wheelbase ESV variant remained strong, declining by just 2.6 and 5.1 percent, respectively, last year. The midsized XT5 crossover also remained strong. As it sheds sedan buyers, the greater presence of SUVs in Cadillac’s mix is boosting the average transaction price. Now, all Cadillac needs to do is field more vehicles buyers actually want.
It’s working on that. As Automotive News reports, Cadillac President Johan de Nysschen is more concerned with the brand’s fiscal health than reaching arbitrary sales targets. On the retail side, his initially controversial Project Pinnacle dealer overhaul is “doing as it has been set up to do,” de Nysschen said recently in Detroit.
On the product front, this year brings a XT4 compact crossover designed to mine gold in a very lucrative segment. A larger crossover is in the works, as are two sedans strategically designed to replace the ATS, CTS, and XTS after 2019. GM’s chief financial officer, Chuck Stevens, expects a doubling of Cadillac’s profits by 2021.
The U.S. market isn’t everything anymore, so Cadillac’s hardly in dire financial straits. Chinese buyers took home more Cadillacs than American customers last year, with the brand’s volume in that country rising 50.8 percent. Outside of the U.S. and China, sales rose 10.1 percent. This makes for a 15.5 percent global sales increase for the 2017 calendar year, something any brand would be happy to see.
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- Alan This outcome was certain.The US, Australia and Canada need to approach this differently. A policy towards plug in hybrids should of been a first step. As in CAFE gradually tighten FE from there.There's no reason why you can't have a 2 litre F-150 with electric motors putting out 400-500hp. A 2 litre turbo is good for 200hp more than enough to move a pickup.Also increase fuel tax/excise every year to fill the void in loss of revenue.
- Doug brockman hardly. Their goals remain to punish us by mandating unsafe unreliable unaffordable battery powered cars
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- Lorenzo Didn't those guys actually test drive cars? I was told that one drove like an old lady, another like a maniac, and the third like a nervous middle aged commuter who needs to get to work on time and can't afford big repair bills, and they got together to pass judgement within their individual expertise. No?
- Lorenzo Aw, I don't care what they call the models, as long as they don't use those dots over the O's.