Analysis: Cadillac CTS Sales Down 39 Percent In First Six Months Of 2015, But Why?
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During the first six months of 2015, the Cadillac CTS was responsible for 9,689 sales. That’s a 39 percent decrease compared to the 16,008 units sold during the same time period in 2014. But is the drop as bad as the numbers would suggest?
Midsize Luxury Passenger Car Sales - June 2015
| Vehicle | June 2015 / June 2014 | June 2015 | June 2014 | H1 2015 / H1 2014 | H1 2015 | H1 2014 |
|---|---|---|---|---|---|---|
| Midsize Luxury Sedan Segment | -38% | 13,022 | 20,924 | -20% | 83,757 | 105,064 |
| Mercedes-Benz E-Class | -44% | 3,611 | 6,500 | -36% | 22,252 | 34,598 |
| BMW 5 Series | -63% | 2,965 | 7,940 | -15% | 23,581 | 27,617 |
| Audi A6/S6 | +11% | 2,431 | 2,191 | -4% | 11,409 | 11,910 |
| Lexus GS | +9% | 1,643 | 1,511 | +10% | 11,142 | 10,122 |
| Cadillac CTS | -29% | 1,535 | 2,174 | -39% | 9,689 | 16,008 |
| Infiniti Q70 | +62% | 613 | 379 | +65% | 4,484 | 2,725 |
| Acura RLX/RL | -2% | 224 | 229 | -42% | 1,200 | 2,084 |
Other segment contenders also experienced drops: the Mercedes-Benz E-Class — the segment’s perennial best-seller — saw sales drop 36 percent to 22,252 units during the first six months. Meanwhile, the BMW 5 Series was off 15 percent to 23,581 units, the Acura RLX/RL was off 42 percent to 1,200 units, and the Audi A6/S6 was down 4 percent to 11,409 units. Taken as a whole, the midsize luxury passenger car segment was down 20 percent during the first six months of the year in the United States.
But two models came away as notable winners during the timeframe. Specifically, the Infiniti Q70 recorded a 65 percent sales jump to 4,484 units, while the Lexus GS recorded a 10 percent sales increase to 11,142 units. As such, it’s worthwhile to note that the midsize luxury sedan segment is experiencing a decline as a whole, though CTS sales are falling faster (39 percent) than the segment average (20 percent).
Repositioning The CTS
We should also note that Cadillac is still repositioning the CTS as a true midsize luxury sedan, compared to the second-gen CTS’ tweener positioning — one where it wasn’t really a compact sport-luxury car nor quite a midsize luxury entry. Keeping this in mind, the sales results aren’t as bad as they could have been. After all, the CTS is the fifth best-selling vehicle in the segment out of a total of nine (Volvo and Maserati are not included in the chart).
To illustrate the benefits of repositioning the CTS, we present the following graphic.
- On the one hand, the third-generation CTS has a higher starting price than the last-, second-generation model, allowing Cadillac to make more per unit, enabling it to maintain healthy model line profitability at a relatively low volume.
- On the other hand, the brand is also maintaining sales volume of the last-gen CTS thanks to the ATS.
Going Forward
Going forward, we can see CTS sales climb at a slow yet steady pace, due to the following circumstances:
- Cadillac has already added some healthy incentives to the 2015 CTS for the summer, which were not around in 2015. These should make the vehicle much more attractive to “on the fence” buyers.
- The third-gen CTS has established and is continuing to establish a customer base at the new, more expensive price point and feature/content level. Going forward, it should build on this by taking customers from the competition. Doing so won’t be easy, but it is possible one day and one sale at a time with the following elements:
- Class-leading product: the CTS is close, but isn’t best-in-class quite yet, in our opinion
- Catchy and effective marketing: this needs a lot of work, not only for the CTS but also for Cadillac as a whole
- Cutting-edge luxury car brand image: existent, but must be improved; the CTS-V should help but is far from the end-all, be-all solution
- Responsive, friendly, and customer-focused retail network: room for improvement on this as well, as evidenced by several first-person accounts
Ultimately, Cadillac has a lot of work to do to increase CTS sales to the levels of BMW and Mercedes-Benz, along with boosting sales of other vehicles in its product portfolio. But the task is by no means impossible to accomplish.
About The Numbers
- Figures provided by each respective automaker/brand
- Volvo S80 and Maserati Ghibli not used in comparison since neither Volvo nor Maserati provide model-per-model sales results
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I was considering buying a 2nd generation CTS but was concerned about the back seat room. Is it fair to say that the 3rd generation is more comparable in size to a Chevrolet Malibu, which seems to have more leg room than a 2nd gen. CTS?
The 3rd gen CTS is considerably bigger than the 2nd gen. They increased the wheelbase by 5 inches and added a considerable amount room to the rear seat. The new CTS is more in line with the STS size wise.
Wake up , those graphing people and analysts and GM techies among us , whose duty it is to chart the trends and instead , why not just smell the roses . They are here in front of you in all their glory . They are called CUVs and SUVs . The market for cars keeps dropping and you can , as a manufacturer , get on board and ride the trend or in the case of GM , who has so many car models in it’s inventory , fight the trend and show North Americans that there is a better life , with a car in their driveway . GM for many years set the marketplace and still appears to want to be that company ,,,, rather now though , like Don Quixote fighting the windmills . What a noble company , but wouldn’t you want to give more respect to a company that is selling what most people want to buy NOW and that what they sell is first in quality and first in Customer Satisfaction ??
The problem with CTS sales is simple…its no longer a “GOOD VALUE”, I have bought or leased 14 new Cadillacs since 1980 and currently have a 2014 CTS Luxury Sedan and a 2012 SRX Performance Edition. Cadillacs have always been a “Good Value”, but my 2014 CTS listed for $11,000 more than my 2011 CTS Premium Coupe. Its great car and in many ways better than the 2011, but its MSRP was within $300 of a comparably equipped Mercedes E-Class. I’m a Cadillac guy so I leased the Cadillac, but I think most people would have gone for the Mercedes because the difference in price is minimal. Cadillac makes a great product, but in my opinion, most consumers consider a Mercedes to be a higher quality and more prestigious brand. Cadillac will continue to loose share against the Germans until it becomes a “GOOD VALUE” again.
The other problem that Cadillac needs to solve immediately is the quality of its service. The dealership that services my cars doesn’t seem to understand the value of the cars they service. My cars are returned dirty, recently a wheel was damaged and every time I bring my cars in the service tech resets the memory settings on the driver’s seat. The Service Experience is a big part of the “Value Proposition”. Until that problem is solved Cadillac will not be considered a ” GOOD VALUE”.
And don’t even get me started on their advertising…after 15 years in that business, I believe I am qualified to say that it sucks !!!
Go build an E-Class and a CTS with comparable options. I think you will see the Cadillac is a way better Value.
The MSRPs of the CTS and a comparably equipped E-Class were only about $300 apart when I bought my 2014 CTS. So which is the better value ????
Frank, that may have been the case, but did you look at the actual equipment of the CTS vs. the E-Class for those prices? Things like Bluetooth was a $500 option on the 2014 MY E-Class; Streaming Bluetooth Audio/A2DP was part of a $1,900 Technology Package on the E-Class. Both were and are standard on the CTS.
The same for OnStar, Remote Start, Keyless entry and push-button start, etc.
If you want “good value” go buy a Buick. Cadillac is about luxury and prestige, without compromises or excuses. And though some Cadillacs have yet to live up to that calling, they’re pretty close.
I’ve bought or leased 14 new Cadillacs since 1980. I’ve had a couple of Coupe DeVilles, a couple of Sevilles, and Eldorado, a Catera, 4 CTS’s, 3 SRXs and an Allante. I’ve always believed that Cadillacs offered the same luxury driving experience as the Germans but at a much lower cost to purchase and maintain. That’s why I’ve considered them a good value. I love my new CTS, but it costs the same as a Mercedes and is in my opinion no longer a good value. I’ve also owned 3 Corvettes over the past 15 years and current have a 2011 Corvette Grand Sport, which I believe is also a good value in the high performance sports car market. I don’t buy Buicks because I don’t like them!!!
That has been the problem for Cadillac is they were the Value Luxury brand and had to sell a ton of volume to make any money with lower quality cars that were pretty much re bodied Chevys.
This has taken them from the standard of the world to where they ended up.
Volume is a killer if you want to be a standard and hold an exclusive image.
The fact is Cadillac’s should not be a car just anyone can own. This is not being snobby but how you build an image. People always want what is just out of reach or something others can not have. It makes a statement they like to express. In recent years a Cadillac has not held this image and it has done a lot of damage that is still being repaired.
Cadillac will transition for the next 5 plus years and will be on the new path but it takes time to travel this road.
The numbers we should be watching and the questions we should be asking is how much money are they making. The numbers for volume will never go back to the recent volume past they have no intention going there. But the profits will go up and will prove to be very good.
They have to have a car line and they will increase the SUV/CUV soon and this will grow profits much.
Again this is all about Profits now not volume.
I think it’s still good value, but to the average consumer that value isn’t as apparent. This is where I think Cadillac got into trouble. Cadillac needs to be that brand that educated consumers buy because they did their homework and found out that they build better cars than the German brands, who instead charge a premium for the badge alone, without the quality substance of Cadillac. Right now it’s like Cadillac is charging a premium without the badge OR clearly superior cars (2nd or 3rd place won’t cut it for the current pricing structure, even if Cadillac has a little more content than the competition when built to match prices).
You don’t win over brand snobs, you make them look stupid. Show me a brand whose prices rely primarily on name recognition and image, and I’ll show you brand that’s one cheaper, yet superior competitor away from being exposed for what they are. German hypebeasts will continue to hypebeast until Cadillac presents itself as a brand consumers buy BECAUSE THEY’RE MAKING THE RIGHT CHOICE THIS TIME, not because they’re uneducated drones LIKE THOSE GERMAN FANBOYS WHO FOLLOW THE HYPE.
I believe Cadillac can get a leg up in brand image over the German brands if THOSE consumers are made to look like the badge hipsters.
I kindly respect your opinion sir and I’ve owned even more Cadillacs so I think my point, too, may be valid. BTW, kudos to you for being a Caddy guy…me too. 🙂
Anyway, your entire write up is the reason why Cadillac is, in some instances, viewed as inferior to the Germans …all those years of “Good Value.” That may have been great for those buyers, but in the long run, it hurt Cadillac’s reputation. “Good Value” is viewed as less than in the minds of real luxury cars buyers. In the consumer’s mind, it’s less for a reason. People then begin to wonder, ” Well, why is it $5,000 less than a Benz or BMW?” “Are they better and that’s why they cost more?” Cadillac is now producing its best lineup of vehicles in modern times and they are as good or better than their German counterparts. Personally, I’m glad Cadillac is pricing their vehicles on par with their respective competitors because they are worthy of that, period. Cadillac is not, nor is it positioning itself to be a ‘value’ luxury brand. Value shoppers should go to Buick, Acura, Chrysler or Hyundai. Cadillac is luxury.
As an automobile enthusiast and owner of the CTS, a CTS SportWagon, Corvette and Yukon Denali I can honestly say the CTS SportWagon would easily get my vote for the best “all around” automobile if I had to pick just one. Sadly the folks at Cadillac have chosen to discontinue the SportWagon and though I’d like to say the sales are down because of it, I know they weren’t great sellers even though they were great vehicles. I wish they’d bring it back – Mercedes, BMW, and Audi all have sport wagons in their line-ups.
The other factor to consider is the ATS impact. The CTS was the undisputed top dog until the ATS came along and like the CTS is an outstanding car. The price point it offers is bound to pull some CTS buyers. Both are fine automobiles.
Still the CTS and CTS V are fabulous cars and I cannot help but believe that if a potential buyer drives the CTS they will buy a CTS. Now if they’d only bring back the CTS SportWagon V, I’d be back at the dealership tomorrow!
You may get another once Europe is back on line. If they can sell one there it will open the door to one here again.
The last one was to have been sold 80% In Europe but the dealer network failed and left it here where it soled in expected numbers.
A wagon is not a key product but it would be nice if we could get a small number from a Euro model.
Cadillac in Europe == NEVER gonna happen.
Look at the cheap and tacky interior of the upcoming ct6.
Look at the dated and boring a&s designs. The horrible instrument cluster of the ats.
Americans and Chinese love plastic and tacky designs.
But Cadillac will never sell cars in Europe. They never have and never will.
The gas guzzling Escalade has no place in Europe (unfortunately).
Too many luxury choices with luxury interiors with modern exteriors build by competent luxury brands in Europe.
But what about the ATS? In this chart it’s clearly showing that it’s pretty much the midsize luxury sedan is declining. But what about the compact luxury sedan?
FrankR
I don’t own a Cadillac but I think you hit the nail on the head. Wish someone at Cadillac would read your comments and take immediate action to correct those problems. Until then I will keep hoping for success with Cadillac and all GM products. I am first and foremost a GM fan but I wish success for Ford also because I am an American fan.
Its true that the latest sales boom of SUV’s is taking a toll on the car market . But there is still a market out there and to compete in that crowded field your car needs to offer something the rest does not , whether its styling or the built in luxury . Price is a factor also , having to put incentives on a car to lower the price takes something away from it . It cheapens the brand , but may get more people to buy . Sales of the CTS arent going to drastically improve until its refreshed in MY 2017 . Isnt this what Johan has been telling the automotive press is that he isnt concerned with volumn , but profit . This isnt a new strategy for Cadillac .
On Velocity ( an automotive channel on my cable ) the Barret Jackson auction was on , and all kinds of cars were on the block to sell , when a 1950’s Cadillac Eldorado came up , it was a complete restoration , and the press agents were telling the crowd all about the car and he even stated ” that Cadillac didnt make any money building this car , it was meant for the wealthy and people in Hollywood at that time . ” It was EXCLUSIVE and built in low numbers . But it was the rest of Cadillacs line-up that helped caryy the cost to built the Eldo . When the gavel finally went down it sold for 6 figures . Long story short , this type of plan that Johan is trying to isnt NEW . But back then Cadillac really was the standard of the world . New technologies , big V-8 engines and craftmenship that was first rate . Anyway , sometimes you need to look to the past to learn how it may work in the here and now . 😉
You have the right idea and see the full picture.
The Cadillac is now going to be a low volume high profit model. The cars will change much in the next 5 years and with the CT8 we will get the full vision of where they are going.
The Volume models will be the SUV models but they too will prove to be much more profitable.
Cadillac in the past was about low volumes and high profits and major image building. By the 50’s Lincoln, Cadillac and Packard were losing their original images. The Cadillac Biarritz and the Lincoln Continental of the 50’s were all about image and not profits. This failed as one car is not going to prop up an entire division. As they entered the 60’s they were just mass production cars that really has no real craftsmanship to them anymore.
Coming in the future Cadillac will rely on technology in the engines, suspensions and inside for driver amenities. This is the craftsmanship of today. They will make cars standard with world class AWD and new DOHC V8 and V6 models only available in a Cadillac. I expect they will even have their own 4 cylinder.
We will see much more advanced technologies in Hybrid that will even product high performance numbers.
These things today are important to image building. The SUV models will also get the same treatment too and will be set much farther from the other lines at Buick and Chevy.
Johan was installed on July 11 2014 so he has been here just about a year and already has accomplished much. Now much as translated to production as the 2015 and 2016 cars were pretty much locked in. As for all new models that will take 5 years. Sorry but that is just the time line it takes to make changes. Yes even LED lights.
The one thing I will disagree with is not all in the past will work today. Parts of it and new paths will be used to market and rebuild the image today. A hand crafted body today means less than a well intergrated entertainment system that can do things no other on the market can provide. Video screens that are larger and better than others on the market. 4G. All of this is where todays buyers are.
Even if you do build the best car that is not a guarantee you will instantly become the top seller in class. Even then it matters little if you are making money. In this segment how much you make per unit is more important than how many you make. Unlike the cars of the 50’s these cars will be expected to return higher profits than any vehicle GM sells.
Backing down on price now would be a short term fix for large inventories only. It would send the wrong signal on image and really would not fix much. If they are making money as I believe they are they can ride this one out.
The next 5 years will be disappointing in some areas but it will also be exciting as they will build image and profits. The whole image game will take at least 10-15 years to build. These things can not be designed or built they have to be earned and that takes more time than it does to design and build the new car.
Yes GM and Cadillac have that time as they are not losing money on these cars now. This affords them the ability to do this right with the proper support. GM for the first time in decades has given Cadillac the freedom and money to do it right. As long as they do not pull it back we should see some dramatic results to be proud of. They may never out sell Benz or BMW but they can and will make well over 50% of all the money takes in on their car lines with the lowest volume in the company and that is a major accomplishment for any automaker .
I personally believe that the prices the CTS, and ATS, are commanding is justifiable when you consider the level of content and engineering they feature. While they may not have yet reached the prestige image and value the Germans have, they are indeed competitive. It’s no secret as to why sales are down: the rise of the CUV, Cadillac’s pathetic marketing approach, higher pricing, and the lack of brand cache are perhaps the biggest culprits, among others. These things can be remedied…..but it’ll take time.
While it’d be satisfying to experience the instant gratification of higher sales, I’m all for Cadillac creating an exclusive image for themselves; even if it means lower sales and a smaller lineup. I’m sure that the onslaught of CUVs Cadillac has planned for the brand will aid in bringing in some much needed sales, but I’d rather they stick to not following the Germans by matching them vehicle for vehicle; Cadillac should seize the opportunity to bring more unique models to the brand.
If you look at the chart , the CTS is fifth place in sales , yet here in these posts people are extolling Cadillac the plan to be more exclusive , more about profit than sales volume . Cadillac has a plan for what years… 2017 to 2020 and that patience is required . This is plain BUNK , in my opinion. You deal with today and tomorrow will look after itself . What do you think the competition , who is beating Caddie in this market segment , today , is going to be selling in 2017 and 2020 ??….sliced bread or refrigerators ? If these imports , who have been outselling Cadillac for years and outselling Caddie now , what are the chances they will be outselling Cadillac in the future ? For some reason , it looks to me that Cadillac seems to think that the competition will be offering dated products in 2017 and 2020 . In CUVs , the timeline is ridiculous . The Europeans will have had minimum two more years , 2017 , to expand the great popularity of their CUVs and if Caddie doesn’t get into this market in a big way by then and 2020 is the goal , that is nearly 5 years . Unbelievable , do you hear this future nonsense from Buick and it’s tight lineup , from Chevrolet or GMC ? They live and fight for every sale , now , today , every day !!
Caddys styling and look is old and stale…..Cadillac had the same wedged body shape for years now…..sure front and rear festas and panel designs has changed a bit over the years…but that’s not enough….the CT6 just looks like a big CTS…….the CT8 would hopfully adopt body styling from the Elmiraj and Ciel concepts inside and out……. they said the CT8 styling would be much more statly upright ……that would take Cadillac a new direction.
looking at the dashbord of the CT6……it looks simuler to the one in the 2000 Deville….the interor and exteror is binded with the CTS and 2000-2005 Deville….the CT6 is a nice car but it looks a little dated…..Cadillac needs a all-new look.
The redesigned 2014 Cadillac CTS midsize luxury sedan at its world debut in the Jazz at Lincoln Center theater ahead of the New York Auto Show in March. The rear styling of the redesigned, bigger Cadillac CTS that goes on sales this fall.