ATLANTA – General Motors took to a Georgia racetrack to show that its first compact Cadillac in a quarter-century drives as well as a BMW 3 Series. The trickier part will be getting it to sell as well.
While the horsepower of the Cadillac ATS is important, its lease payment ultimately may determine the success of the new model. BMW and Mercedes-Benz have fueled much of their growth with monthly lease deals on the 3 Series and C-Class that have, in some cases, dipped as low as $299 a month. High resale values help, too.
If the price is similar to the Europeans and the monthly payment similar, it will be a challenge to reach their volumes, Tom Libby, lead North American analyst for R.L. Polk & Co., said in a telephone interview. Those two brands and those two models, particularly the 3 Series, have extraordinary equity in the mind of the luxury consumer.
GM wont chase BMW and Mercedes into a price war, Don Butler, Cadillac vice president for marketing, said during an interview in an ATS parked alongside the Atlanta Motorsports Park racetrack, where GM showed the new car to reviewers.
We need to show that we are in the game, in the ballpark, but Im not going to be as successful as I need to be in terms of building the brand if its kind of distressed from the start, and if its almost bribing people to come give me an opportunity, Butler said. Where do you go from there?
GM, based in Detroit, is counting on the ATS to increase Cadillac sales in the United States and China as part of Chief Executive Officer Dan Akersons push to make the brand more global. He wants to boost luxury brand sales to offset declines in high-margin trucks.
The ATS and XTS full-size sedan introduced earlier this year are the first new Cadillac offerings since 2009s SRX sport-utility vehicle and 2010s coupe version of the CTS sedan. They are the first nameplates added to the brands lineup since the SRX was introduced in 2003.
Cadillac was once the epitome of luxury: The first brand to mass-produce a V-8 engine in 1915, it was known for big, comfortable cars and later for its hulking Escalade SUV. In 1988, it stopped making its last compact, the Cimarron, which Time magazine called one of the 50 worst cars of all time.
Cadillac hasnt led in U.S. luxury sales since 1997, Libby said, and last year sold only about 60 percent as many vehicles as BMW and Mercedes-Benz in the U.S.
GM began a TV ad campaign for the ATS last month during the opening night of the Olympics. The vehicle starts arriving in showrooms in August and September.
The sedan starts at $33,095, excluding destination costs, and will have monthly lease payments around $389 to $399, Butler said. The 3 Series begins at $36,500 with monthly lease prices advertised as low as $399 per month and the C-Class starts at $34,800 with lease offers as low as $369 per month, according to BMW and Mercedes websites.