Cadillac ELR Pricing to Reflect Strengthened Brand

DETROIT – Don Butler, vice president-Cadillac U.S. marketing, says the brand’s recent emergence from luxury obscurity gives it the clout to bring to market an expensive niche vehicle such as the ’14 ELR extended-range electric coupe.

Butler declines to provide pricing on the ELR after its unveiling at the North American International Auto Show here today, saying only, “It is a Cadillac. Real leather, real wood, stunning design…We believe the price point will be quite fitting for Cadillac.”

But the Chevrolet Volt, which uses the same fuel-saving Voltec powertrain that combines battery power with a range-extending internal-combustion engine, starts at about $40,000 before federal tax credits or other dealer discounts. The high sticker price has been a headwind for the Volt

With all the luxury amenities offered in the ELR, it almost certainly will be priced much higher than the Volt. That’s the point, Butler says. “Given the exclusivity, we’re quite comfortable with what we are planning.”

According to General Motors, Cadillac’s average transaction prices declined between 2009 and 2011, from $45,000 to $44,200. But so did its mix. Sales of the Escalade large SUV comprised 24.5% of sales in 2009 and 14.4% last year. The Escalade is the brand’s most expensive vehicle, costing about $28,000 more than any other vehicle in the Cadillac portfolio.

So as Cadillac has broadened its offerings with products such as the XTS large sedan and ATS compact sports sedan, its pricing arguably has increased.

“It’s a journey for us in terms of continuing to build and elevate the brand,” Butler says singling out the ATS as an example. Named North American Car of the Year this week at the show, GM prices the car head-to-head with its key rival, the BMW 3-Series.

When Cadillac brought its first BMW-fighter to market 10 years ago in the first-generation CTS sports sedan, the car was much larger than the 3-Series but priced lower.

“We think with the strategic approach we have to pricing, we’re making the right statement with ATS,” Butler says. “(The) ELR is a luxury vehicle, and you can expect prices in those realms. There’s nothing like this on the road.”

GM plans to keep ELR production levels low, probably far less that the 24,196 Volts it built last year, making the Cadillac model the epitome of a niche luxury vehicle.

“Luxury buyers want exclusivity. That’s why we know this car is really going to work for us,” Butler says. “Having said that, there are things they will not give up, such as comfort. They want attention to detail (and) authentic materials. We believe the ELR is right on target with what we want to do as a brand.”

GM plans to keep ELR distribution within the world’s three largest markets of North America, Europe and China.

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