WSJ - September 16, 2014:

Many previous Cadillac customers don't want to pay the higher asking prices for the new model and not enough Mercedes, BMW and Audi loyalists are willing to consider Cadillac. Mr. de Nysschen won't simply cut CTS and ATS prices, because it could undermine resale values.

Interesting reversal. Things must be really, really, really bad out there in Cadillac land.

 

Uhh...

 

What Cadillac is not saying is probably content will go down too.

 

Probably. Its more a perception thing. Say good bye to the rear view camera, and possibly CUE as standard.

 

Mr. Nysschen's decision or GM's?

 

Not sure it matters............. Either way, he is either:

1) Losing his control/say.

2) Going back on almost every word that has came out of his mouth the last 6 months.


I guess the next question is; which is it and which is worse?

 

So much for holding the line at pricing

 

This is a big, stupid mistake. Firstly, because CTS buyers are likley to be less price concious than ATS buyers, secondly because most cars in the CTS class are leased not bought, third because it makes Cadillac management seem like they say one thing and do another, four because it drives the narrative that Cadilllac is a failure, five because the CTS is objectively worth the current asking price, the problem is brand management which is NOt helped by price cuts, six because it hurts resale and seven its insulting to those who have already paid full price for a CTS...

What I would have done is to delete the 2.5 engine standard model ATS, and make the ATS 2.0 Luxury model the base ATS with the same price as the current 2.5l base ATS, and reduce option prices for the Luxury, Performance and Premium trims. That would allow cadilllac not to reduce base prices, but reduce overall prices for a car that price concious shoppers will look at, and is more likely to be bought not leased. Leave the CTS alone, except maybe for reducing the price of some options at the upper end.

 

The ATS starts at $33,065, if you dropped the price it would start at 30k. I don't think that is the right move there.

Patrick hit the nail on the head. There is not near enough content for that $34k.

 

Why the CTS? Its actually been doing OK. The ATS has been hammered. Its a brand new model that is reaching to brand new customers.

This reversal is pretty stupid and on the completely wrong car.

 

The ATS starts at $33,065, if you dropped the price it would start at 30k. I don't think that is the right move there.

 

The mustache man lost.

 

It would seem so.

 

Good looking cars sell themselves. The CTS needs money off because it looks too much like every other Cadillac offering. The CT6 will be no different. Typical old GM here. Make great looking concepts but never bring them to market. Like I said years ago, wake me up when Cadillac builds the Ciel.

 

Time to move HQ back to Detroit.

 

Right next door to Mary Barra's office too.

 

Maybe they got a good deal on renting the NYC HQ and are simply returning those $$$ to the customers.

 

Could Cadillac have looked at the potential price of the CTS-V and seen it just to high over the current CTS price. Along with the upcoming CT6 price point. Then with the obvious slow sales of the current car.

 

An $80,000 CTS-V would be a goddam steal.

 

Knocking $3K off of a $10K increase is not particularly damaging to the brand and maybe gives them the space they need to have the customer take a 2nd look before they walk. At least that much in incentives on the hood as it is.
Incentives are more brand damaging than actual price reductions, especially to the average Joe who will walk in unaware that it was previously priced higher.

 

Plus, they can and will creep the price back up over the next few years and into the next generation.

 

In other news, Caddy's team also walks back from the decision to move the Division HQ to Manhattan and reverses course on the new product naming scheme.

 

Which way do we go today???????

 

It's a good thing if the Cadillac plans to move to a higher level of customization (I hope they start with CT6).

 

Fix the rear and make a lease program that is more competitive. Why not do something different and offer an attractive (relative of course) lease offer on the CTS-V?

 

My gut is telling me that it wasn't Nysschen's decision to cut the CTS's price. His brand strategy to keep Cadillac products at a high price point among the Germans is a sound plan. I haven't witnessed a better strategy to allure high value customers to the brand. Being the bargain luxury maker has no appeal to those customers. Nysschen specifically pointed out that many traditional Cadillac customers would be sacrificed. The price cut doesn't necessarily indicate that the new brand strategy has failed. IMO, the strategy was introduced 5 years to soon at minimum. Some problems are within in the product line, but what's killing Cadillac is the brand's image compared to the Germans. What luxury buyer would purchase a lackluster CTS over a women grabbing MB, Audi or BMW at the same price? That being said, the CT6 is the most important launch in Cadillac's entire history. It must be the product that changes the face of Cadillac.

 

I think it was de Nysschen's decision to cut the price. But I think they've adjusted pricing to a point where the "initial cost of entry" is lower, but the overall cost will even out when all said is done.
A $1-3,000 change isn't going to affect buyers all that much. So the CTS is now $42-44,000. That wouldn't change many people's mind. It's still a fairly pricey car for most people who got a Gen2 CTS.

Within 1 model year, the CTS will be up by $1-1.5K anyways. So essentially, they're jut getting some breathing room for 1 year.


CT6 is another animal. I still think it'll price at the $70-75,000 range. But given the pricing shuffle, it may go down as low as $68,000. Cadillac needs to be careful to make the statement that it is a true flagship, not an Equus wannabe. So don't expect a $60-65,000 price tag.

 

This makes a lot of sense if you think about it rather than throw stones. The CT6 is coming in on the heels of the CTS V. They are going to be price competitve with the CT6 and the CTS V is the halo for the CTS range. So if you follow without a CT6 launch coming pricing on the CTS could stay the same. However, now that the CTS line has been fleshed out it was reaching into the base pricing of the CT6. Thus lower the CTS prices come in with a reasonable base model CT6 and bam you do not have 3 models overpriced anymore and eating your companies first true flagship base model (CT6) meaning the CTS 3.6 AWD, CTS V-Sport, CTS V-Series were getting too pricey and too close to the base CT6 in both value and content. This creates breathing room for a slightly lower entry price of the CT6 base and they can pick up where they left off in the incremental quantum leap in price bracket with the CT6 loaded. Then, Johan can dust off the super omega plan and play with the 6 figures

 

"Cadillac chief Johan de Nysschen had previously said the brand would not cut base prices, but left the door open to repackaging options so that buyers would pay a lower price overall. Luxury car brands are reluctant to cut sticker prices because that could hurt the image of the brand and the value of vehicles already on the road."

http://finance.yahoo.com/news/gm-cuts-price-most-cadillac-cts-sedans-amid-211754005--finance.html

Even before Christmas the Buick/GMC/Cadillac dealership in Costa Mesa posted signs on the all of the Cadillac windshields
"Reduced Price"
"30% OFF!"
For a minute, I thought I was looking at the K-Mart or 99 Cent Store prices. It was horrible to see Cadillac degraded like this.

Great location 'fellas'. No BMW, Mercedes, Jaguar/LandRover or Lexus dealers to worry about nearby. Could it be that there are no potential wealthy customers in the neighborhood? Duh.
And why do you place Cadillac at the bottom of your totem pole? Is it because that is where it belongs in your scheme of things?

 

They had to do this. It's one thing to say we won't lower prices, it's another thing when sales are piss poor mainly due to the price, which shouldn't have been this high in the first place.
OK, a run on sentence but you know what I mean

 

Booooooold moves, Cadillac.

Did we not just spend the past few weeks smashing our keyboards going on about how Cadillac had to force out the poor heathens who could just barely scrap together enough change from their couch cushions to buy a Cadillac? Now we're allowing them back into Cadillac dealerships with the faint hope of owning a CTS?

Cadillac starts 2015 as a discount luxury car brand. Maybe 2016 will be brighter?

Bold moves.

 

Just another move on the chessboard.

 

IMO, I think the reduce pricing has something to do with keeping the supply in check with the workers to keep them from being lay off further at the plant. The union must of got a hold of the board member to influence Cadillac to lower the price to keep the workers busy.

Although I don't agree that the pricing needs to be slashed, it will move inventory faster but not by much. If the customer really wanted the car and can use $1,000-$3,000 reduction, now is a good time to look at the CTS.

 

If the customer really wanted the car and can use $1,000-$3,000 reduction, now is a good time...

Agreed! Saw an ad at Walmart, they did a Rollback on 12-packs of tube socks, I am totally going to stock up...

 

The real question, and story, here is where this came from. Is Caddy's new golden boy already getting vetoed by the brass?

 

In response to a question in another thread about GM offering incentives on Cadillac models:

The new dictum is "Going Forward", 2015 models and after. There's little else GM can do to move the cars sitting around in inventory but to lower prices. Sad, but true.

Change '2015' to 'TBD' and yes, I agree.

Which stemmed from an apparently severe misjudgment of predicted market acceptance of full-priced Cadillacs.

I quote this statement, from another thread, for truthiness.

We are in an adjustment period at Cadillac. They're holding the line on pricing, and will be managing options and feature sets better to make it look more competitive or superior to the competition, but the price is the price.

Apparently the Price Was Wrong, Bob! Want a better deal on a Cadillac in 2015, come on dowwwwn!

 

(If I'm insisting on this point it's because I totally disagreed at the start of this recent Cadillac debate, and actually was starting to potentially maybe possibly see the method behind the madness...

No, it isn't the end of the world, but it sure sends a mixed message...)