Cadillac’s Top U.S. Marketer Eyes Fourth-Quarter Rally

NEW YORK – Cadillac is counting on a fourth-quarter rally to top last year’s sales total, even with deliveries through Sept. 30 running 15% below like-2011, says Don Butler, the General Motors brand’s chief U.S. marketer.

Robust launches of the flagship XTS fullsize and ATS compact sedans will lead the luxury brand to a strong finish by the end of 2012, he tells WardsAuto at a meeting of the International Automotive Motor Press Assn. here.

“Cadillac sales tend to do well in the fourth quarter. November and December are a great season for luxury cars and Cadillac,” says Butler, U.S. vice president-marketing. “That's why I expect a really good performance in the last quarter. I would be disappointed if we didn't overtake 2011 sales totals.”

Deliveries through the year’s first nine months plunged because the GM brand was selling out stocks of discontinued STS and DTS large sedans that have been replaced by the XTS. Cadillac also deliberately reduced sales of daily rental fleet units, he says.

When the new XTS and ATS are fully ramped up, Butler forecasts a double-digit increase in volumes over the year’s final two months. October also is shaping up as a strong month.

Cadillac residuals also are increasing. “We don't have to put as much support behind our new models.” The XTS, which has a starting price of $44,995, is transacting “north of $50,000.

“We're also building more of our Platinum Edition, (which) has a base price of $60,000, than originally planned,” Butler says. The brand now projects Platinum Edition models will account for 15% of XTS sales.

But Cadillac is cautiously increasing output of that model to avoid being saddled with excess capacity. “I would rather be conservative than flood dealers with unwanted vehicles. I'm not reaching for the sky, but I always want more (sales).”

The XTS is on track to outsell combined 2011 totals of the STS and DTS this year. “XTS volume will be well above 20,000 units next year,” Butler predicts.

ATS, Cadillac's newest entry, saw average transaction prices of roughly $44,000-$45,000 upon introduction. “We expect that to drop to upper $30,000s to low $40,000s.” He cites the ATS as an example of a luxury brand with the potential to achieve conquest sales as Camry and Accord owners go upscale.

Butler expects further growth now that GM CEO Dan Akerson has tasked Bob Ferguson with expanding the brand’s reach in the newly created position of vice president-Cadillac global. Butler reports directly to Ferguson.

GM’s plan for Cadillac is to transform the brand into something similar to the role that Audi plays within Volkswagen Group. He doesn't expect Cadillac to match its German competitor’s global sales, but the GM brand’s volume will grow as it expands its portfolio. “Our global aspirations are unbounded.”

Cadillac will roll out 10 new models over the next three years, Butler says. Next year will see the debut of the ELR, a hybrid that will share its core propulsion technology with the Chevrolet Volt but will offer what he describes as distinctive styling and be very much a luxury model. “It will sell as much for its looks as its propulsion technology.”

The ELR will debut next year, probably at the Los Angeles auto show, but he doubts it will come to market before 2014. However, the next-generation CTS and Escalade models will debut next year and be available in dealer showrooms.

Butler says his wish list includes larger and smaller models. Without confirming any previous rumors, he says he would like Cadillac to introduce a larger model priced closer to the BMW 7-Series than the Mercedes S-Class.

“At the other end of the spectrum, I would like a luxury (cross/utility) vehicle, something to compete against the BMW X1 and X3 and the Audi Q3. Our ambition is to separate ourselves from the rest of the pack.”

The marketer says annual volume approaching 1 million units by the end of the decade might be too ambitious for Cadillac. “It's not a volume war,” Butler says. “Success for us is creating a truly iconic luxury brand. We won't chase volume for volume's sake.”