When Cadillac began rejuvenating its brand with the CTS after “the Caddy that zigs” failed to raise the brand’s equity, the “Standard of the World” was considered a competitive vehicle and a good value. Over 10 years later, Cadillac’s trajectory is such that its cars go head-to-head against the Germans on all front, and its brand equity is such that it doesn’t need value as a selling proposition.
According to Businesweek, the Cadillac CTS sold for $54,571 on average for the month of March, which is about $1300 less than the Mercedes E-Class and about $1800 less than the BMW 5-Series. This illustrates that American consumers are considering Cadillac an equal alternative to the Germans. Interestingly, the previous-generation CTS from a year ago was selling for less than $44,000—or more than $16,000 less than its German rivals—although admittedly the previous CTS was straddling the line between 3-series and 5-Series competitors.
Sales volume is a different story, as Cadillac lags behind the Germans, but with the CTS garnering more profit per car sold and selling for prices on par with the Germans, it’s validation that Cadillac’s strategy is working and that General Motors doesn’t have to play second fiddle despite being the big bad corporate giant.
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“Sales volume is a different story, as Cadillac lags behind the Germans, but with the CTS garnering more profit per car sold and selling for prices on par with the Germans, it’s validation that Cadillac’s strategy is working and that General Motors doesn’t have to play second fiddle despite being the big bad corporate giant.”
^ This needs to be tattooed onto the forehead of every blow-hard Lincoln fan who insists that the MKZ will destroy not only Cadillac, but GM.
Being $2000 off the average transaction price of your rivals is a damn sight better than being $16K behind….which the top trim MKZ is.
Good job Cadillac. Keep it going and don’t let up.
Totally agree with this. Also, Lincoln’s problem has been that—for the last several years—it hasn’t been able to supply cars that were indistinguishable from their Ford counterparts. This problem has been compounded by the fact that the new Fords are really quite nice. The MKZ has a few gimmicky features (like the *huge* sunroof and the push-button gear selector), but it really isn’t justifiably nicer than a Fusion Titanium. It’s a bad problem to have. Contrast that with the CTS, which offers style, architecture, luxury and at least one power-train that you cannot find on lesser GM brands…and that’s not to say that the Malibu and Regal aren’t themselves quite nice in upper trims.
I think the styling is up a good notch from the previous model which is helping the equity.
Cadillac still has a way to go to convince all the German buying snobs that they are in the same market. Will take time.
Cadillac will be getting something difficult; respect buyer retrieve value / money car
When GM regained that respect, sales themselves come ……………….
Keep go on Cadillac
Regards from Spain
Considering that GM has invested over $10 Billion in Caddy to revitalize it and this is the 3rd gen CTS… It should perform n be equal to the competition from Europe… And someday it just might make a profit n repay the investment …. In 10+ years or more!!!
While Ford has spoon fed Lincoln a mere few hundred Million $$$ to create a niche competitor in the current MKZ that is producing greater sales than the Caddy ATS or CTS…. It’s just that Lincoln has positioned for a different niche of the market n is NOT going after the BMW 3 like everyone else because its too crowded and there are better markets with unmet needs n fewer competitors than can produce greater Profits faster…!!!
It’s all about the Bottomline n Not everyone needs to compete in the same niche… That’s Lincoln’s strategy n is starting to pay off…!!!
Just watch the new MKC crossover n next gen MKX n undated Navigator to see where Lincoln is headed n will be more Profitable than Caddy…!
Absolutely right about Lincoln. No competitor of BMW or Cadillac for sure.
Closest to it now is the Buick lineup.
“While Ford has spoon fed Lincoln a mere few hundred Million $$$ to create a niche competitor in the current MKZ that is producing greater sales than the Caddy ATS or CTS”
First of all, the MKZ and the CTS are both mid-size cars. Lincoln has no compact luxury car as Cadillac does with the ATS.
Also, Lincoln can’t be a niche automaker when they’re relying on a lower price to move units and appeal to less discerning consumers. That’s the opposite of a niche automaker, that’s just your standard volume automaker.
The fact is that because Ford has only “spoon fed Lincoln a mere few hundred Million $$$”, the Lincoln range doesn’t impress upon the buyer that Lincoln is concerned with product quality; that the lower ATP is penalty for for corner-cutting and Friday afternoon engineering. It may appeal to some buyers, but the MKZ interior is the weakest among the mid-size luxury cars.
If Lincoln wants to command Cadillac/Mercedes/BMW prices, then Ford needs to stop presenting Lincoln to the public as being a “it’ll have to do” brand of people who want to feel important, but don’t want to roll like those who own a mainstream luxury car.
Lincoln can sell as many MKZ’s as they like and can boast about it at the end of the MY, it doesn’t do anything to make their product appear exceptional or cutting edge because Ford is relying on volume to make money and not on product. When you’re $16K+ down against your cross-town rival in the same segment, then you’re going to attract people who don’t have an eye for the quality or workmanship, and who don’t care about their public image with regards to the products they buy.
That $16K gap remains. However, just image what kind of interior or performance dynamics the MKZ could have if Ford spent $16K more. It would go a long way, and perhaps then Lincoln could join the ranks of the more popular mainstream luxury automakers.
Lincoln is not a “luxury” brand. They are a mid market brand with fancy chrome and nicer leather on a Ford product.
You could say the same thing for Audi on VW and Lexus on Toyotas and Infinity on Nissans and Acura on Hondas and so on…!
It’s called platform sharing n it makes economic sense in this global market n soon Caddy will share with Chevy n Buick n then what’s ur excuse???
Today Caddy is only selling less than 100,000 combined sales on the ATS-CTS platform n that’s Expensive so they better command an extra $16k for the suckers dumb enough to pay!
Just because Ford Toyota VW and Honda are smart enough to share platforms with their upscale brands and make more money than Caddy… That’s GMs problem!!!
GM already shares the LWB epsilon among Chevrolet, Buick, and Cadillac. The K2XX and Theta are also shared. Beyond that, only Alpha at present is used exclusively by Cadillac, although not for much longer. Therefore, your platform sharing argument is weak and ineffectual.
But I see I struck a nerve with you; The MKZ being incapable of commanding E-class, CTS, and 5 series prices. Don’t waste your energy with flimsy excuses here on GMA. Yell at Ford for making an sub-standard product and for believe that it can compete with the mainstream luxury automakers.
You need to get out of the mindset of a sales race; luxury isn’t about unit sales, it’s about product quality and exclusivity.
The MKZ can outsell the CTS this year and the next, but it won’t prove that the MKZ is a product worth $52K when it performs and is engineered like a common $35K midsize sedan; hence why the Fusion is trampling on any chance the MKZ has at being taken seriously.
But If you’re incapible of letting go of unit sales, consider a hypothetical 20K CTS sold in 2014. Times $52K ATP = $1,040,000,000
For Lincoln to get 1.04B too, they need to sell 28,000 top spec MKZ’s, which they won’t do in 2014.
For the record, 32K * CTS ATP = 1,664,000,000
32K * top spec MKZ = 1,184,000,000
Heck, even the smaller ATS can command and exceed prices of even the most expensive MKZ, and they’re both not even in the same class. Surely that alone should tell you that Ford does not have a clue what a luxury product is, or how to make one.
the mkz rivals the cts gs a6 5series and eclass in size just not in price
the regular mkz is an es competitor but the more powerful ecoboost version is a gs’er
Such a confused mind!!!!
Lincoln is NOT positioned to compete with BMW MB or Caddy n Audi in select markets….!!!
Listen to what I’m saying!!!!
Lincoln is selecting Non-BMW niches to avoid all other luxury car makers that are chasing the same market!!!
It’s a limited size…!!!
There are only so many customers n Caddy will learn there are NOT enough customers in that market to produce enough volume to generate enough profits to sustain the brand!!!!
Lincoln understands this Business and has chosen NOT to compete in an Over Crowded market…!!!
It’s business basics 101…!!!
It’s better to compete where there are unmet needs by a growing number of customers n that is where Lincoln is focused….!!!
You do not need a BMW to compete in a Non-BMW market….!
Not every luxury customer wants a stiff uncomfortable ride like a BMW… Or Caddy ATS CTS…
There are Other luxury markets n Lincoln has chosen NOT to compete in the over crowded n over priced BMW market like Caddy has foolishly chosen
So what if a CTS is almost as good as a BMW if you can’t sell enough volume to make a significant Profit to overcome platform engineering costs!
That’s Caddy’s problem because they have already Sunk over $10 Billion into Caddy platforms with too low volume sales to make a profit…!!!
All other smart car mfgrs understand You need volume n scale to make profit…!
Look at Toyota Camry volume n its impact on the very profitable Lexus ES350… Cash cow!!! Show me the Caddy with the same business model … None= stupid!!!
Ford is leveraging the global Fusion / Mondeo sales to leverage profits in the Lincoln MKZ….!!!
Doesn’t matter it’s Not a BMW when its making tons of profits Caddy can only dream of with your expensive low volume platforms that make minimal money…!
It’s business and profits … Bottomline!!
VW is successful with platform sharing Audis that are primarily FWD… Ford will do the same with Lincoln in the next 10-years…!!!
“Lincoln is selecting Non-BMW niches to avoid all other luxury car makers that are chasing the same market!!!”
u know cadillac was exactly like that when the cts and sts were tweeners (one being the 3/5 tweener, another being the 5/7 tweener).
caddie is no longer tarting up oldsmobiles and buicks
linkys cars barely share any parts with relatives from the ford division
“Look at Toyota Camry volume n its impact on the very profitable Lexus ES350… Cash cow!!! Show me the Caddy with the same business model … None= stupid!!!”
The XTS. How did that escape you?
I bet you you didn’t even check to see what platform it shares within GM (Impala, Regal, Insignia, Malibu, Lacrosse,), or did you just assume foolishly that it was had is own platform. I also don’t know why you’re trying to turn this into a debate about platform sharing, as I’m not against it and I urge GM to use it responsibly. You’re trying to attack a position I do not hold, fool.
But I can dismiss all of your hot air with a phrase I’m sure you’ve heard of; Quality over Quantity.
Compare the GL with the MKT and you’ll see why there is a $20K gap. It isn’t because the GL and MKT are a ‘hard riding’ cars, no, one product is consistently and quantifiable better than the other (the GL). Because Ford is unwilling and incapable of making a vehicle that fully competes with the GL, it speaks to the idea that the MKT is junk and not as well engineered. The quantity of GL’s sold each year is just a side effect of it being a better product.
Funny how you keep insisting that Lincoln is chasing after other segments. What segments are those? Allow me to jog your memory.
MKC – compact
MKX, MKZ – mid size
MKS, MKT, Navigator – full size
Hardly niche markets, as all of Lincolns products fit nicely in existing segments, of which Lincoln gets consistently out-gunned by better built and better quality products. This has nothing to do with ‘hard riding’ cars and has everything to do with offering the best luxury car now.
“Not every luxury customer wants a stiff uncomfortable ride like a BMW… Or Caddy ATS CTS”
This part is funny. You still think that BMW or Cadillac can’t offer a comfortable car; that a 3-series or ATS are all stiff and uncomfortable. Put your comfortable MKS against a 7-series, and you’ll see why the Germans have earned their reputation in ride quality, and how Lincoln’s inferior trash could never hold a candle to it, not even in product quality.
The price of a luxury product reflects it’s exclusivity. If a MKZ isn’t priced like a luxury good, then it isn’t a luxury product. The same goes for every luxury automaker and EVERY luxury product, from clothing to whisky to homes. Luxury isn’t cheap, and a $37K MKZ doesn’t say luxury, especially if it’s incapable of commanding the prices expected of the segment.
If Lincoln continues to ignore product quality and focus on quantity (as you insist), then Lincoln will only be known for it’s cheap knock-off alternatives that are inferior copies of the genuine article; low-hanging fruit that doesn’t offer lasting rewards, just cheap thrill and cheaper quality.
After all, you said it best. It’s about making money. I’ve already done the math for you before. I’ll repeat it so you can look at it again, and perhaps you’ll actually come up with a working argument rather than more hot air and excuses:
But If you’re incapable of letting go of unit sales, consider a hypothetical 20K CTS sold in 2014. Times $52K ATP = $1,040,000,000
For Lincoln to get 1.04B too, they need to sell 28,000 top spec MKZ’s, which they won’t do in 2014.
For the record, 32K * CTS ATP = 1,664,000,000
32K * top spec MKZ = 1,184,000,000
Remember, quality over quantity.
News Alert:
This just in… Caddy’s are piling up at dealerships across the country:
ATS – 153 days supply
CTS – 149 days
XTS -179 days
That’s more than double the normal 60-day supply… Maybe Caddy’s ARE over priced…!!!!
The new ELR – 725 days supply 2 years!
Ref: http://www.thetruthaboutcars.com/
It’s not a sales race. It’s a quality race.
Sell as many downmarket Lincolns at rock bottom prices as you like, and the owners will never know what a luxury is because they have something that anyone can have without effort. Wal-Mart parking will be full of Lincoln owners with rapidly deprecating cars buying toilet paper and TV dinners in bulk because they have no understanding of a quality product.
Be exclusive, be exclusionary. Quality over quantity. Luxury buyers will always demand products who’s quality is better than average and not freely available to the common man. The days on late metric is not a measure of product quality.
Excuse me Butt…???
Which car company is recalling millions of vehicles for a wide variety of quality problems across all their product lines…?
Oh that’s right… It’s GM…!!!
What were you saying about Quality??
It is about quality. Despite all the recalls GM has announced lately, it still can’t hide the fact that the CTS’s ATP is $16K more than the best MKZ.
You can check back at the beginning of the article and read about it. The MKZ, even on it’s best day, cannot command CTS prices, even with all the recalls GM has issued. The MKZ is, even without any major recalls, an inferior product because it price doesn’t reflect the expectations of a luxury buyer.
Obsessing about the MKZ’s unit sales won’t matter when it racing to the bottom of the product exclusivity ladder with the Chrysler 200 in a race of which can be the most unluxurious by being common, along with their crippling residuals.
But hey, trying to tell a dyed-in-wool capitalist that product quality and exclusivity matter in a product that is, by definition a non-necessity, is difficult. Considering that all they care about it volume and not cache or quality, it’s like trying to make the distinction between a Glenfiddich 21 year old and family value bucket of chicken.
The bucket is a better value and more greasy fatty chicken, but luxury will never be about value for money, as it will always be about quality.
If you have to ask what the price of Glenfiddich 21 is, you’re not a luxury consumer.
Lincoln isn’t even in the same class as Buick. When Lincoln becomes relevant, we can continue this conversation. (Waiting for hell to freeze over)