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Cadillac vows discipline on incentives


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Cadillac vows discipline on incentives

Mike Colias

and David Barkholz

Automotive News -- December 13, 2010 - 12:01 am ET

DETROIT -- In the past, when rivals unveiled incentives, Cadillac ditched its existing program and upped the bargains.

"A year ago, we'd get to the 10th of the month and it would be 'Oh, holy smokes, we're tracking behind,' " says Kurt McNeil, Cadillac's vice president of U.S. sales and service. "Or 'Mercedes just announced this or Lexus just announced this; we need to match it.' "

Today, even amid a fierce scrum in the rebounding luxury market, Cadillac bosses have simplified incentives and have vowed not to blink if sales fall short or competitors juice deals. The discipline is part of a renewed confidence at Cadillac, as General Motors Co.'s premium brand caps a resurgent 2010.

Sales are up 38 percent through November, topping rises at Lexus, up 8 percent; Mercedes-Benz, 19 percent; BMW, 12 percent; and Infiniti, up 26 percent.

Proliferating holiday deals among luxury brands are testing Cadillac's resolve. In a bid to be the top-selling luxury brand for the 11th straight year, Lexus boosted incentives 82 percent in November from a year earlier to an average $2,105 per vehicle, according to Edmunds.com.

Cadillac incentives in November fell 6 percent to $5,359 per vehicle. BMW and Mercedes also cut spending.

Cadillac's incentives remain the highest among luxury brands, averaging $4,829 through November. BMW's were next at $3,658.

Jeremy Anwyl, CEO of Edmunds.com, warns: "Cadillac's product lineup is getting a little aged," except for the SRX crossover. "I think that discipline will be challenged by competitors with new models that can pick up market share with fairly low incentives," such as the redesigned BMW 5 series.

Cadillac officials say they're making promotions more user-friendly for dealers by eliminating fine print and not wavering midway through a 60-day promotion. In the past, a deal might have required buyers to switch from a competing brand or to get their car loans through a certain bank, says Don Butler, Cadillac's vice president of marketing.

"We're telling dealers: 'Here's the play, let's line up behind it," he says.

Carl Sewell, whose Dallas store is the flagship of Sewell Motor Co.'s three Cadillac stores in Texas, says GM's discipline on 60-day programs allows salespeople to have a consistent dialogue about models.

He also says customers have complimented Cadillac's new program for the 2011 model year, including maintenance in the cost of the vehicles. "It gives comfort to get all the service" at the time of purchase, says Sewell, who is co-chair of the Cadillac dealer council and a member of the GM dealer council.

McNeil says the service program and improving the clarity of Cadillac promotions are part of going "back to a better level of customer handling and treatment."

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20101213/RETAIL01/312139949/1422#ixzz17zzC94GX

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They need to get some compelling products before the can lower the incentives. Multiple versions of an "ok" CTS just aren't going to cut it. People aren't busting down the doors to buy a CTS.

ATS... that's the where the war will be won or lost.

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