Re: Businessweek: Profit Goal Means Fixing ‘Critical’ Sedans

Interesting article in Business Week on GM’s moves to adjust inventory levels on the Malibu and CTS.  I had noted when we looked at the monthly Sales Reports that CTS sales continue to be muted.   I suspect that some previous CTS buyers are going into the new SRX.  But the CTS still needs to hold up its sales numbers.  Especially troubling is that the CTS sales include the new CTS Sport Wagon, so they should not only be up but up nicely with the new model out.

The CTS sedan was released in 2007 as a 2008 model, so the current model is 3 years old (2010 models are on the lots now).

The CTS Coupe is set to arrive this summer, in both V6 and CTS-V Coupe forms.  That should boost sales for the CTS nicely, but it will also take away from sales of the CTS sedan, and CTS-V sedan as some sedan customers select Coupes instead.

From the article:

Malibu and CTS inventory reached a five-month supply in late 2009, more than double the industry average of roughly two months, Reuss said. The CTS was priced too high against models such as Bayerische Motoren Werke AG’s 3-Series, he said.

GM slashed CTS prices this week by as much as $3,000, said Steve Shannon, executive director of marketing for Cadillac. One popular version was pared to $39,990 from $42,255, with monthly lease payments dropping to $369 from $417, he said. BMW’s U.S. Web site advertises 3-Series leases for as low as $379.

Adjusting the price of the CTS to make it more attractive in the market place makes terrific sense to me.  AND it makes it a great time to buy a new CTS.

I am also concerned that GM / Cadillac advertising & marketing seems very sequential.  In other words they focus on one model at a time — right now the SRX.  Almost all the media I see are for the SRX.  No CTS ads, limited Sport Wagon ads, no Escalade ads.  Cadillac needs to find a way to ‘up’ all their vehicles, not just the flavor of the month:

Here’s the new 2010 SRX and it joins the award winning CTS Sedan and the new CTS Sport Wagon in the Cadillac luxury performance stable!

Introducing new models or having specific models is good but you have to also highlight your entire line.  Perhaps one of the reasons some Cadillac models are languishing (thinking STS and XLR but DTS as well) is that you can’t even find them mentioned in current Cadillac media outside of the website.

Original article: GM Meeting Whitacre Profit Goal Means Fixing ‘Critical’ Sedans – BusinessWeek.

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