Cadillac to Dial Back CTS Production as Brand-New ATS is Stealing Sales

If you build the right product, customers will come. The thing is, some of them may come from places you don't want them to. The Cadillac ATScompact sports saloon is still young but after its launch in September, sales of its slightly bigger sibling, the CTS, dipped a mighty 40 percent in October.According to data from Edmunds, that’s no coincidence. The ATS might be intended as a direct BMW 3-Series rival yet the CTS is also one of the most cross-shopped models amongst its potential buyers.The good news for the brand, apart of course from the recent Motor Trend comparison test outcome, is that the Munich's saloon is also on that list.

It’s not a rare phenomenon for two models of the same brand to encroach on each other's space, but it’s still one that all manufacturers do their best to avoid. That’s because they don’t want buyers choosing between two of their products; they want to win over other manufacturers’ customers.

Cadillac U.S. sales chief Chase Hawkins told Automotive News that the company won’t be stockpiling CTS inventory and then be forced to apply huge discounts, as it had done in the past to its great loss.

“We’ve planned for ATS to take some CTS customers out of the market who we otherwise would have seen”, said Hawkins. “We definitely are going to be producing fewer CTSs next year to create some of that space for ATS.”

Cutting back on the older model’s production rate is a short-term measure. Cadillac hopes that the problem will be solved when the two cars put some more distance between them. This will happen towards the end of 2013, when the next-generation CTS, which will be larger and pricier than today’s car moving up to BMW 5-Series territory, will hit the dealerships.

 

By Andrew Tsaousis

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Posted in: Cadillac