Slow sales will do that.
About 15 months ago, Cadillac raised the sticker price of its then all-new CTS sedan. By doing so, Cadillac hoped it would further push the brand upmarket. A larger price range would also be created between it and the smaller ATS. So on paper the idea seemed logical. But loyal and returning CTS buyers balked at the new price and walked away. Some even went to the competition. Not good. And despite that, Cadillac’s CEO insisted the pricing would remain in place. Now he’s eating his words.
The luxury brand just announced a $1,000 to $3,000 price reduction on most 2015 CTS models. At the same time additional content is being added to a few trim levels. Cadillac dealerships are now breathing a huge sigh of relief. With Cadillac sales falling 7 percent last year, compared with a 6 percent increase overall for the luxury market, something had to give. Those dealerships kept telling Cadillac management to stop raising prices to BMW and Mercedes level so quickly; it needed to be done more gradually. Compared to the previous CTS, the new one was priced $6,000 to $15,000 higher, depending on the options. Now Cadillac will have to wait and see if this new pricing strategy brings back those lost customers.