GM idling Michigan plant 3 weeks to trim Cadillac ATS, CTS supplies
DETROIT -- General Motors will idle the Michigan plant that produces the Cadillac ATS and CTS for three weeks amid a glut of inventory.
The company's Grand River Assembly plant in Lansing, Mich., will stop production beginning the week of Aug. 18, and resume output on Sept. 8, according to two people familiar with the plant's schedule.
GM spokeswoman Erin Davis said the company "does not comment on production schedules" and that it is "matching supply to demand."
The move comes as U.S. sales of the ATS and CTS sag, pushing inventories to unusually high levels.
On Aug. 1, there were 15,100 ATS sedans on dealer lots or in transit, or a 152-day supply based on the recent selling rate, according to the Automotive News Data Center. CTS inventory stood at 16,900 units, or a 215-day supply.
Dealership lots also are swollen with excess supply of Cadillac's two other passenger cars: The XTS sedan, assembled in Canada, had a 152-day supply on Aug. 1; and the ELR plug-in hybrid's inventory stood at 1,400 units, a 194-day supply at the coupe's glacial selling pace.
GM dealers have sold just 578 of the $75,995 ELR (including destination fees) since its January launch. It's built at GM's Detroit-Hamtramck assembly plant in Michigan.
Overall, Cadillac's car inventory stood at 44,700 units on Aug. 1. That’s equal to a 172-day supply -- about triple the level that is considered healthy. By comparison, Lincoln's car inventory was 87 days on Aug. 1. Audi's was 45 and BMW's was 42.
Overall, Cadillac’s U.S. sales have slipped 2 percent to 97,358 this year through July, in a luxury market that has expanded 6 percent.
Cadillac is also the only GM brand to post a decline in deliveries in an overall light-vehicle market that has expanded 5 percent year-to-date. A bright spot for Cadillac has been in the hot crossover market; Cadillac SRX sales are up 16 percent.
ATS sales have cooled this year, falling 21 percent through July, to 17,492 units. The compact was a new entry for Cadillac when it was launched in September 2012, receiving wide acclaim by the automotive press as a car on a par with German rivals, BMW's 3 series and Mercedes-Benz' C class.
In January, research firm ALG sharply revised downward the ATS' residuals, citing bloated inventory levels and incentives that were higher than GM initially forecast.
Analysts say the ATS is being squeezed by the 3 series and C class, as well as the new entry-level priced Mercedes CLA and Audi A3, in one of the luxury market’s most competitive segments. The compact luxury segment has expanded 9 percent through July.
Sales of the CTS sedan are flat this year at 18,047 units, but fell 29 percent in July. The mid-sized luxury segment, which includes the BMW 5 series and the Mercedes E class, has grown 3 percent through July. Cadillac launched a redesigned version of the mid-sized sport sedan last fall, increasing the price by more than $10,000 over the previous generation on certain models.
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