Cadillac cutting prices on its CTS sedan in the US by as much as $3,000

Article by Christian Andrei, on January 10, 2015

Cadillac has learned the hard way that increasing the price of its CTS sedan in the United States would be a bad thing – as it contributed to the luxury brand’s sales decline last year. While the overall luxury car market surged 6 percent, Cadillac dropped 7 percent last year.

That drop came after hiked the sticker price of the MY2014 CTS by between $6,000 and $15,000. Most MY2015 CTS models will have sticker prices trimmed by between $1,000 and $3,000, according to a memo Cadillac sent to dealers.

In the memo, Cadillac said it reduced CTS prices "after receiving feedback from both dealers and customers." Dealers have complained that the luxury carmaker is trying to price its newer entries head-to-head with market leaders BMW and Mercedes-Benz, which has discouraged some returning customers for the brand.

Cadillac dealer Howard Drake, also chairman of Cadillac's National Dealer Council, told Automotive News in an interview in December that the council was concerned of the pricing being too high. He remarked that their reservations were not alleviated by their sales performance.

He disclosed that only one nameplate had loftier prices sans incentives: the MY2015 Escalade SUV. In 2014, Cadillac saw US sales of the CTS drop 4 percent to 31,115 units, compared with a 3-percent dive for the midsize luxury sedan segment.

Rival models posted deeper decline like the BMW 5 series that dropped 7 percent to 52,704 units and the Mercedes E class that fell 5 percent to 66,400. However, the CTS had higher average incentive just to be sold at $9,213, according to research firm Autodata.

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