Cadillac CTS entry-level luxury sedan is Catera replacement

Reuters reported yesterday that Mark LaNeve the new head of the Cadillac division revealed to reporters late Tuesday their goals for U.S. sales of the new Cadillac CTS entry-level luxury sedan; "We'd be shooting for 30,000 units. It's ambitious compared to our historical penetration with that segment," LaNeve, former head of U.S. sales for Ford Motor Co.'s Volvo unit, joined Cadillac last month to replace Michael O'Malley, who resigned to head global advertising and marketing for the Ford brand. "We need the college kids to look at our car and say, I want one of those when I grow up," LaNeve said. Cadillac hopes the bold, sharper-edged styling of the CTS will help attract younger buyers, a market segment Cadillac has had trouble with in recent years and will erase memories of the Catera, which never lived up to expectations. U.S. sales of the Catera topped out at 25,411 in 1997, its first full year of production. Despite heavy consumer incentives, U.S. sales dropped to 15,068 in 1999 and 17,290 in 2000 reported Reuters. The CTS will go into production at GM's new Lansing, Michigan assembly plant late this year, and officially go on sale early next year. Prices are expected in the $30,000 to $35,000 range. LaNeve said the CTS will be bigger, with bolder styling, and priced for value to compete in the entry-level luxury segment against the BMW 3 Series, the Mercedes C-Class, the Audi A4, and the new Jaguar X-Type. "CTS is a totally different product. I don't even look at it as a Catera replacement," he said. "I think we're going to stand out in a good way. People are looking for the opportunity to stand out from the crowd. That's our heritage." Later, the CTS will go on sale in Europe, where Cadillac hopes to expand sales. Automakers are aggressively attacking the entry-level luxury market with lower-priced entries. LaNeve said he expects some luxury brands to begin offering lower-priced models starting around $24,000, but Cadillac may not compete in that lower price range. "I personally don't think we're going to chase a lot of volume down low," he said. The CTS arrives about the same time as the new Cadillac Escalade EXT, similar to the Chevrolet Avalanche full-size sport utility vehicle/pickup truck crossover. LaNeve said he expects annual sales of about 10,000 to 12,000 for the EXT. Once the leading U.S. seller of luxury vehicles, Cadillac sales this year have dropped 26.4 percent to 42,235 units, behind BMW AG, DaimlerChrysler AG's Mercedes, Toyota Motor Corp.'s Lexus and Ford Motor Co.'s Lincoln. Reuters reported Cadillac officials said part of the drop was due to the decision to back off fleet sales to daily rental agencies during the first half of this year in order to boost resale values.