DETROIT -- Cadillac President Johan de Nysschen said sales of the ATS compact sedan have been hurt by the Mercedes CLA and other lower-priced recent entries, and he plans to respond with an entry-level sedan of his own.
The ATS "is being compared to the new entrants that have come on in this exploding market segment populated by CLA and the Audi A3 sedan," de Nysschen said on the sidelines of the auto show here. "Suddenly, you have access to a Mercedes-Benz at $30,000, whereas the ATS is starting several thousand dollars higher."
De Nysschen said Cadillac is developing an entry level sedan slotted below the ATS to fend off those rivals, calling it a "big priority."
ATS sales sank 22 percent last year, to 29,890 cars sold, amid the more intense competition. The CLA came close to that in its first full year on sale: 27,365. Audi sold 22,250 A3s in about eight months.
The ATS starts at $34,985, including destination fee. The CLA’s base price is $31,750. The A3’s base is $31,690.
Cramped rear seats
De Nysschen also said he believes that some buyers are turned off by the ATS' cramped rear seat room. The next-generation ATS, he said, "must address some of the criticisms on the rear seat accommodations. And it will do so."
Cadillac is developing a car that would fit below the ATS, de Nysschen said, declining to put a time frame on its arrival.
Unlike the front-wheel-drive layout of the CLA -- which is less expensive to develop and typically allows for more interior space -- Cadillac plans to build its future entry-level sedan on the same rwd platform that underpins the ATS, codenamed Alpha.
"The cost and packaging advantages of front-wheel drive are appealing. But Cadillac is the challenger brand," de Nysschen said. "We want to build our reputation as a purveyor of high-performance drivers' cars … so it's better that we do it off a rear-wheel drive architecture."