Cadillac ATS sales cannibalizing pricier CTS numbers

Trevor Hofmann - CAP staff
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Cadillac's ATS and CTS model scenario is a bit confusing. At first, many thought the new ATS would compete against BMW's 1 Series, Mercedes-Benz' B-Class, and Audi's A3, not to mention other compact premium models like the Volvo C30. And why wouldn't we? General Motors' luxury most premium brand doesn't have a model in this range and it's considered the fastest growing segment, while its CTS was already pegged against the 3 Series, C-Class and A4.

Certainly the CTS was and continues to be larger than its main rivals, but this just follows a traditional American more-for-less marketing philosophy; in this case more size for the same or less money. And other up-and-comers follow the same strategy. Infiniti's G and Volvo's S60 are both larger albeit priced similarly to the class-leading Germans, and Acura's TL is larger still, but nevertheless competing for the same premium dollar.

Since Cadillac released the car's specifications, however, it became evident they had their ATS sights aimed at the 3 Series and C-Class all along. It's not only sized and weighted almost identically to its German rivals, but its performance-oriented marketing is unquestionably targeting buyers of those cars.

The problem? No problem at all, says Cadillac. Oh sure, ATS sales are doing more damage to CTS numbers than they are to BMW, Mercedes and Audi, but this was expected says to the Detroit luxury brand.

"We've planned for ATS to take some CTS customers out of the market who we otherwise would have seen," said Cadillac's U.S. sales chief Chase Hawkins to Automotive News. "We definitely are going to be producing fewer CTSs next year to create some of that space for ATS."

Just some CTS customers? Automotive News reports that CTS sales have "nosedived" since the ATS became available in September, experiencing a 40-percent decline in deliveries.

This only makes sense considering the ATS is getting the majority of Cadillac advertising dollars. The new kid on the block is creating a lot of buzz in the press too, and it appears deservedly so. It not only outmaneuvers both BMW's 3 and Mercedes' C when roads and tracks start to wind, as well as beats them off the line, but it delivers more luxury too.

While strong advertising and positive reviews will no doubt affect its competitors bottom lines as well as putting a dent into Cadillac's own CTS, is cited as saying that, for the time being at least, the CTS is the most cross-shopped vehicle amongst would-be ATS buyers.

Sales cannibalism isn't new, of course, although such a high take-rate at the expense of a single model is rare. Normally it's a sign that the model losing out is about to make a dramatic change. An example of this, although in a completely different market segment, is when Toyota introduced a much larger Tacoma pickup truck in 2004. It so closely measured the old three-quarter sized Tundra that the less expensive and entirely new Tacoma immediately stole sales from the larger truck. This continued until a new and much larger Tundra arrived two years later. The same growth pattern is reportedly true of the future Cadillac CTS.

The CTS, however, won't need to grow much larger to be able to compete directly with the 5 Series and E-Class. Then again we don't know for sure if this is Cadillac's tact. While it has a lot of brand equity in the CTS nameplate, having been Cadillac's bestseller since it entered the lineup, it's difficult to say if midsize premium buyers will immediately accept it into the E-segment. The CTS has been a 3 Series and C-Class competitor since inception after all, so maybe Cadillac will dust off an old name from the past and label it DTS, or better yet, choose to rename the new model ETS to compete within the E-segment. Maybe we should just expect CTS. After all, the ATS isn't having any trouble wooing CTS buyers, now is it?
©(Copyright Canadian Auto Press)

Topics: Cadillac, ATS, CTS, 2013, Sport Sedan,

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