The ATS sedan was Cadillac’s unmistakably bold shot across the bow in the general direction of the BMW 3 Series, Mercedes-Benz C-Class, and Audi A4/S4 — all of which have established themselves as the stalwarts of the compact-luxury segment, which has traditionally been led by BMW. During launch, GM’s goal with the ATS couldn’t be any more explicit: to steal BMW customers, with ads even mentioning the 3 Series by name.
But while the ATS matches up and even surpasses the 3 Series in certain aspects, the vehicle hasn’t commanded 3 Series prices: through the first six months of 2013, the average transaction price of the ATS was $39,459, compared to $44,764 for the 3 Series, according to data from Edmunds.com. On top of that, the ATS had greater incentives of $4,088 per unit, compared to $3,555 for the 3 Series. The gap between what customers pay at the dealership compared to the suggested retail price clearly presents the challenge currently faced by Cadillac as it moves into the sport-luxury segment to compete head-to-head with BMW and its two German rivals.
Part of the reason behind the pricing disparity is the fact that the 3 Series enjoys a broader lineup that, more often than not, commands higher prices. For instance, the 3 Series is offered in sedan, coupe, convertible, and high-performance M3 variants — with the sedan being the least expensive of the group. Meanwhile, the ATS is currently offered only as a sedan, although an ATS Coupe and high-performance ATS-V variants are on their way for the 2014 or 2015 model year.
The difference in price between the ATS and its main rival also exhibits the edge enjoyed by the BMW brand over that of Cadillac, even though the ATS has drawn a significant amount of critical acclaim, going so far as to win the coveted 2013 North American Car of the Year award. More encouraging is the fact that real-world ATS pricing is more competitive with other top-selling luxury compacts: through June, the Alpha-based ATS sedan commanded roughly $1,000 less than the Mercedes-Benz C-Class sedan, while topping the Audi A4’s average transaction price by roughly $2,000.
For now, the ATS is serving its purpose, and doing so very well by attracting a new, younger customer to the brand. According to Cadillac spokesperson David Caldwell, 74 percent of ATS buyers are new to Cadillac and 20 percent are under 35. Through July, Cadillac sold 22,088 units — right in line with estimates set out by analysts.
The GM Authority Take
The overall image of the Cadillac brand should significantly change for the better over the next few years, as the brand overhauls its product portfolio with class-leading vehicles. It all started with the 2013 ATS and XTS, and will continue with the ATS Coupe and ATS-V, the all-new 2014 CTS to rival the BMW 5er, the 2015/2016 Omega-based LTS to take on the BMW 7er, as well as an overhaul in the brand’s CUV lineup, not to mention the next-generation K2XX-based 2015 Escalade. The better, class-leading product should elevate the brand’s overall perception, and consumers will be much more willing to pay top-dollar for Cadillacs; a rise in average transaction prices should follow. For now, those in the market for an ATS should simply expect to pay less.