Why Caddy has 2 ways to play the ELR pricing game

Automotive News | January 17, 2013 - 2:47 pm EST

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DETROIT -- The most common question on the lips of onlookers who saw Cadillac unveil its flashy and fuel-sipping ELR plug-in hybrid at the auto show was: "How much?"

It's too early for General Motors execs to discuss price. The coupe won't hit showrooms for about a year. But the guessing has begun.

I've heard estimates anywhere from the low $50,000s to north of $70,000.

How could the spread be that big? Because GM could look at the decision in two very different ways:

1. Put a relatively inexpensive sticker on it -- let's say low $50,000s. That would show that GM wants to get some modest volumes from the ELR so it can continue to drive down per-unit component costs of the Volt powertrain.

2. Slap a big sticker on it -- say mid-$60,000s or higher -- to test just how rejuvenated the Cadillac brand is.

"The thing we don't know is whether getting piece-cost reduction of the Voltec drivetrain is more important to them than Cadillac's image enhancement," says Jim Hall, principal of research firm 2953 Analytics Inc. in suburban Detroit.

I'm betting on the latter: an eye-popping sticker meant to convey exclusivity.

Sure, critics will scoff at a mid- or high-$60,000s price and deride the ELR as a dressed-up Volt.

But Caddy execs believe they have a combination of bold styling, interior luxury and unique powertrain that rivals can't match. And I'll bet they price it accordingly.

Caddy execs believe they have a combination of bold styling, interior luxury and unique powertrain in the ELR that rivals can't match. And I'll bet they price it accordingly.

Read between the lines of the following remarks:

"Cadillac ought to have an air of exclusivity," Cadillac brand head Bob Ferguson told me. "The manufacturing for this vehicle will be limited. We're saying, 'Get in fast and buy it. We're only going to make so many, and for so long.'"

Cadillac brand head Bob Ferguson: "Cadillac ought to have an air of exclusivity."

Photo credit: REUTERS

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