Cadillac To Cut CTS Production Due To ATS Cannibalization

For years, the Cadillac CTS has been the best selling Cadillac model. As Cadillac’s entry-level model, it was priced to compete with the BMW 3-series, despite being much larger in size. Along with the SRX, it has been the only seriously competitive Cadillac in recent memory.

That is beginning to change though. While the CTS didn’t take on the 3 or 5-series directly, the ATS is changing that. Winning rave reviews, it is the first Cadillac to directly challenge the BW 3-series. Like the situation with the CTS and STS, the arrival of the ATS creates a short-term problem. The ATS and CTS don’t have enough differentiation. Many industry observers have speculated that the ATS will cannibalize sales of the CTS.

Edmunds.com has some new data out that shows that buyers are cross-shopping the ATS against the CTS, along with the 3-series. Also, actual sales data bears this out as well: CTS sales are down by 40 percent in October. Of course it is nearing the end of it’s life cycle, but it is certain that ATS is playing a role in that.

Automotive News spoke with Cadillac sales head Chase Hawkins, who said that GM was expecting this. “We’ve planned for ATS to take some CTS customers out of the market who we otherwise would have seen…We definitely are going to be producing fewer CTSs next year to create some of that space for ATS.” Next year we could see even more of an emphasis on the coupe and V-series line-up as a way to differentiate from the ATS. Things will change for the 2014 model year when the CTS grows in size and price to compete with the BMW 5-series. This move will best position Cadillac for growth in the United States and abroad.

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