Cadillac reported its 11th consecutive month of sales growth yesterday, thanks in part to warm reception of the ATS and XTS sedans. That, however, is only just the start of the brand’s growth says Cadillac communications manager David Caldwell.
Last month the XTS full-size sedan sold 2,891 units—the highest volume of the brand’s portfolio. The ATS compact sedan came in a close second with 2,725.
“We’re simply looking for growth – we are already gaining market share and making progress, and we do expect that momentum to continue,” he said in an email. “The top priority is growth in the U.S. We do expect growth of about 50 percent in China this year. That’s important.”
Cadillac’s young customer lure
Growth in the luxury car market is shifting away from its traditionally older customer base as brands like Audi, BMW and Mercedes move to modular platforms and lower entry prices. Those products are all front-wheel drive based, which is something German luxury turned a cold shoulder toward until very recently.
Cadillac almost went in the same direction with the ATS. In fact, the brand recently admitted that it tested a front-wheel drive version on the Nurburgring. It just wasn’t good enough.
Where does that put Cadillac now? As Caldwell said, the brand is hungry for growth, and the approach seems to be working.
“The launch of XTS and ATS in the second half of 2012 of course gave us the ability to fully compete in key luxury car segments, head-to-head,” he said. “And now the consumer reception is strong, with new buyers coming in to the brand.”
Perhaps most notably, Caldwell said conquest sales make up 80 percent of the ATS customer base. Additionally, 20 percent of its customers are younger than 35, which will be key to Cadillac’s continued success.
Strong sales and average transaction prices
Sales have been strong for the ATS Since its launch last year, with sales through last month totaling just under 19,500. That number bests the XTS, which posted strong sales for the brand as well with 17,940 units according to data from Automotive News.
“The average transaction price [for the brand] is rising – even following the launch of the smaller ATS,” he said while highlighted that the ATS is its second-best seller, behind the SRX crossover.
Transaction prices specifically for the ATS are actually about $1,000 higher than the base MSRP, which after delivery hovers just under $34,000. Initially, the transaction prices were between $38,000 and $39,000, something Caldwell attributed to the brand only offering higher trim levels.
Those numbers have leveled off in subsequent months and steadily remained around $35,000.
CTS to elevate brand image first, volume second
Cadillac’s next step will be to release an all-new version of the CTS, which moves upmarket in its new generation. First unveiled during the New York Auto Show, the CTS will be better positioned to compete against cars like the BMW 5 Series. The new Vsport variant offers a twin-turbo V6 with 420 hp.
Following the CTS, Cadillac will also introduce a new Escalade. The SUV came close to being cut from the brand’s family altogether, but its status as a perennial cash cow for the brand kept it alive.
In the more immediate future, the CTS will offer Cadillac further growth and a more competitive edge against German brands. Interestingly, the aforementioned desire t expand isn’t the primary goal for the third-generation CTS.
“While we do look at it as a growth opportunity, it is also about elevating – establishing and growing prestige is just as important…” or perhaps even more important than overall volume, Caldwell said.
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