Cadillac President Says They Are Leading The Germans In Average Transaction Price

Though it still has a long way to go, Cadillac is making surprising progress in making a significant contribution to General Motors’ bottom line.

Though its newest cars are getting good reviews, its new-found financial health has more to do with how the business is being run.

Johann de Nysschen, the president of Cadillac who formerly worked at Audi and Infiniti, says Cadillac now is being managed more like a start-up company. He moved operations from Detroit to New York and focused his organization on achieving three simple targets: Get more models, reduce dealer inventory and boost transaction prices.

Read Article

autopal - 5/10/2016 9:59:58 AM

+3 Boost

Average transaction prices doesn't necessarily translate to higher margins. It should not be difficult for Cadillac to have a higher ATP than the Germans because of the effect of the expensive Escalade and their much lower overall sales volume.

TheSteve - 5/10/2016 12:30:17 PM

+1 Boost

How numbers can be misleading: Lesson #84

Example:

Manufacturer A sells the following vehicles:
- 41 @ $30,000
- 20 @ $35,000
- 5 @ $40,000
=Average Selling Price: $32,272.73

Manufacturer B sells the following vehicles:
- 4 @ $29,000
- 6 @ $35,000
=Average Selling Price: $32,600

While Manufacturer B can brag about selling their vehicles at a higher Average Selling Price, which in isolation sounds like a Good Thing(TM), that statement, in fact, does not reflect a number of other factors, which are not brag-worthy, such as:
- Manufacturer B sells far fewer vehicles
- Manufacturer B offers fewer models
- Manufacturer B has a smaller market share
- Manufacturer A sells more vehicles, at a price that's higher than Manufacturer B's "higher selling price"!

Conclusion:
The "Higher Average Transaction Price" number can be useless, or even misleading.

MDarringer - 5/10/2016 8:40:32 PM

+1 Boost

Our Cadillac data does not support this rosy picture.

TomM - 5/10/2016 9:09:42 PM

+4 Boost

Matt - look at it this way

Cadillac is having a real problem selling the ATS - their cheapest car. ANd the CTS is also a non-seller. So what is selling? THe Escalade is selling. Otherwise - the only other big seller is the Crossover SRX now being replaced by the more expensive XT5. WHen you add in the average Escalade at probably over $80,000 - the reason why Cadillac CAN lead is because its cheaper cars can't be given away.

MDarringer - 5/11/2016 8:13:11 PM

+1 Boost

@TomM There is no need to explain math to me. I understand it perfectly and despise when people use it to create fuzzy logic idiocy like the headline is based on. You clearly are not insightful enough to realize that I was commenting on the implication of the title as a universal truth.

Your average price "estimate" for an Escalade is wildly low.

The ATS and CTS most decidedly ARE being given away they both transact easily at $10K off for the ATS and $15K off for the CTS. GM is buying down the glut as we speak.

skytop - 5/10/2016 10:29:22 PM

-1 Boost

Americans love to buy Chevrolets rebadged as Cadillacs. Wow, are they smart.