By on January 29, 2018

2018 Cadillac XT5 - Image: Cadillac

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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25 Comments on “Ballooning U.S. Cadillac Transaction Prices Hide a Not-so-silver Lining...”

  • avatar

    So there are plenty of folks buying ?leasing Caddy’s just not cars. If they are seeing at records levels of 54K , they are moving in the right direction they , like almost everyone else just needs more trucks/suv/cuv and it seems they are working on that. I know DW will hate it but Caddy seems to be doing fine, maybe not like the B&B would want but in the real world they are making money and got their prices up 25% in 5 years and no one would ever have thought that 6 years ago. Give credit where credit is due, they are doing something right.

  • avatar
    bumpy ii

    Two Cadillac sedans is one too many. I’d dump everything except a CT6 replacement, and let the model name reflect the cylinder count: CT4, CT6, or CT8.

    • 0 avatar

      But what about the Greatest Generation and the rental companies begging for some of that sweet sweet XTS love? ;-)

    • 0 avatar

      Agreed. Stretch the wheelbase of the LaCrosse, make sure it looks properly fancy in black, and make that into the GM livery car.

      • 0 avatar

        @dal – I always approve of wheelbase stretch. I felt that the Town Car L should have been the standard wheelbase for the Lincoln, the 122 in wheelbase of the actual Town Car should have been standard on the Grand Marquis, and the 114 in wheelbase that the Grand Marquis/Crown Victoria had should have been reserved just for the plebeian Crown Victoria.

    • 0 avatar

      I’m in general agreement here. Cadillac should drop all except the CT6, and strive for it to be a very good, all-around competent, fast-enough large car. Perhaps offer a high performance model as an upgrade for those who may want it. Then, they have the Escalade for the SUV market. Cadillac is not BMW and they should forget about trying to be them. As far as smaller cars, the market is speaking loudly and clearly.

    • 0 avatar

      The problem with the Cadillac sedans have been packaging (particularly the ATS and CTS) and too many being at a similar price-point (CTS, XTS and CT6).

      The CT5 will be the ATS replacement, but growing back to the size of the 2G CTS.

      The CT6 will be refashioned as Cadillac’s mid-segment competitor.

      The CT4 will be Cadillac’s A Class, A3 and 1 Series competitor, but unlike them, will be RWD.

      Further down the road, Cadillac will have a flagship offering (CT7), but likely will get the fastback treatment.

      On the light truck front, Cadillac has plans for 5 CUVs in addition to the Escalade.

  • avatar

    “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.”

    What I find interesting is Cadillac’s average transaction price is $6500 more than the average transaction price Ford reported on the F-series pickup. Which puts the pickup within $500 of the average luxury car transaction. And Ford sold… what… almost 900,000 of them?

  • avatar

    $50K will get you a nicely optioned 3 series, A4 or MBZ C series. Not arguing with the data but what are these “luxury” brands referenced in the post?

    Another way of looking at the US data is that Cadillac is selling mostly Escalades. Maybe mean rather than average selling price might be more helpful.

    Regardless it is good news that Cadillac is making the rent if not banking a lot of cash.

    • 0 avatar

      My guess would be most of the lease special 3 series and C class book out in the low 40’s. My guess would be Lexus ES and Acuras etc would all be counted as well. Cadillac ATP is almost certainly driven by Escaladae.

      • 0 avatar

        That and the fact that they sell a good # of sedans in the mid-price range with the CTS, XTS and CT6 (far more than anyone not MB or BMW).

        Also, low ATS sales helps.

        ATP for the CTS has risen quite a bit; some of that can be attributed to lower CTS sales and some to the fact that those who purchase the CTS tend to do so in the higher trims, as well as the CTS-V.

  • avatar
    Kyree S. Williams

    The way I see it, the ATS and CTS present an interesting dilemma. Cadillac could do one of three things:

    1. It could replace the ATS with a mid or full-sized FWD-based car that competes directly with the ES. But…the LaCrosse already does that, and so does the XTS

    2. It could just kill off both models

    3. It could replace them with a single RWD-based model, firmly in the mid-size arena. I recommend they do that. In essence, kill off the ATS. It can’t be all that profitable, and the compact car rat race is pretty much owned by the mainstays

    • 0 avatar

      I agree with option number three, which I think is most likely. The ATS missed the mark, because Cadillac aimed at the smaller E46 BMW 3 Series, but BMW moved the target by going bigger with the F30. Something slightly larger than the F30 would be about right, and would render the CTS unnecessary.

    • 0 avatar

      Does ATS really cost Cadillac all that much? It also boosts volume on Alpha which makes cars like the Camaro possible.

    • 0 avatar

      Isn’t that sort of what Acura did with the TLX, dropped one smaller and one larger and split the difference, with middling sales results if I recall.
      I fear cars (vs trucks) are sadly going to become niche products, like manual transmissions, and will be slowly choked out of existence.

    • 0 avatar

      The CT5 is similar in size to the 2G CTS and will be the ATS replacement.

      The CT6 will be refashioned as Cadillac’s mid-segment offering.

      Cadillac’s sedan lineup is going “larger than the norm” – which is something they should have stuck with as the 1G/2G CTS were larger than the typical entry-level offering (only the G/Q50 being similar in size).

      Also, by going this route, Cadillac can do away with having to engineer LWB versions for the China market.

  • avatar

    I drive a 2016 CTS 3.6 AWD after owning a string of BMWs. I’ve now had it for over a year and a half, and I still love the car. It’s not without it’s faults, but neither is any other car. My ownership experience has been better than with BMW, as my Cadillac dealer actually tries to please the customer. It’s too bad more European car buyers don’t give Cadillac a fair try.

  • avatar

    I am deciding between the 535i/d and CTS v-sport (both CPOs) for my next purchase. The CTS is a compelling car.

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