Seeking luxury cred, Cadillac to raise prices
Marketer: Brand should be competitive and profitable
Don Butler: Cadillac will go after the best in the segment.
Photo credit: J.D. POWER
LAS VEGAS -- Cadillac plans to raise prices of its future vehicles to match, roughly, their German rivals, part of a plan to win more credibility from luxury shoppers.
The CTS sedan, for example, is similar in size to the BMW 5 series, but the base 5 series is more than $8,000 more expensive than the base CTS. That price gap will narrow for the next-generation CTS and other Cadillac vehicles, says Don Butler, Cadillac's vice president of marketing. The redesigned CTS is scheduled for the 2014 model year.
"You can expect that as we develop products that are targeted to go after the best in the segment, that from a pricing standpoint they're going to be very similar," Butler said last week on the sidelines of the J.D. Power and Associates Automotive Marketing Round-table here.
In a speech at the event, Butler said Cadillac will be "unapologetic" about its vehicles as a serious global luxury brand.
However, he indicated that Cadillac will continue to have at least some price advantage over German rivals.
"We want to be competitive, but I don't want to be in a position where in a sense I'm bribing consumers to experience our product," Butler said.
Cadillac's global push will become more important to General Motors' bottom line, Butler said. Consumers are shifting to smaller, more fuel-efficient vehicles, cutting sales and profits of GM's light trucks.
"As a manufacturer, you need a luxury brand to establish not only credibility" but also profitability, he said.
Butler called the ATS compact sedan, which went on sale in the United States last month, the "anchor" of the brand's bid for global luxury competitiveness. The sticker price for the 2013 base model is $33,990 vs. $37,395 for BMW's car in the same segment, the 2013 3-series sedan. The prices include destination charges.
The segment appeals to millennial shoppers for whom the ATS may be their first luxury car, Butler said. Millennials, also called Gen Y, were born in the 1980s and 1990s and came of age with ubiquitous Internet information and entertainment. "Millennials in general represent a huge opportunity for us -- to leapfrog over some of the challenges we have with boomers," Butler said.
Cadillac spends 25 percent of its marketing budget on digital commercials and other Web advertising, up from 17 percent three years ago, he said.
Butler said: "We think digital first, prior to broad-cast."
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