Cadillac has confirmed that the brand is planning to increase the
prices of their vehicles in the coming years and this plan will most
likely happen.
According
to a number of reliable sources, Cadillac's plan of boosting the prices
of its vehicles up was triggered by the rising cost of raw materials,
vehicle components or the costs of labor involved in producing luxury
vehicles. The planned increase was basically due to the brand's
intention to take its luxury credentials to a higher level and somehow
match the prices of its rivals from Europe such as the Mercedes Benz and
BMW.
In lieu of this particular plan, Don Butler who is the
current vice president of Cadillac explained that there is great need
for the brand to increase the prices of its vehicle so as to
re-establish Cadillac's status as a producer of luxury vehicles.
In
a statement, Butler cited the Cadillac CTS as a good example of how the
brand's car models are priced way below its European rivals. According
to Butler, the current base price of the CTS is about $8000 lower than
its closest competitor which is the BMW 5-Series and this price
difference could be considered as a great deal for luxury car shoppers
who want to earn larger savings. However, by looking at the situation
from the luxury market's point of view, the lower base price of CTS
could become a great issue since selling a luxury car at a very low
price diminishes its value and this could also turn the CTS to a common
vehicle rather than a luxurious one.
With this line of reasoning,
Butler implied that raising the prices of Cadillac vehicles closer to
that of its European rivals would dramatically change the public's
notion towards the models marketed by the brand. Thus, Cadillac's image
will also turn into a brand which is responsible for producing and
selling "exclusive" cars for the buying population who is willing to
spend large amounts of money just to own a luxury vehicle.
Although
this move would possibly reduce Cadillac's sales output, Butler hinted
that he is quite optimistic that this would bring a number of sales
benefits for the brand not only in terms of sales but also on its image
as a luxury car producer as long as Cadillac would be able to retain the
luxury elements that made it a popular brand in the US and in other
markets where their vehicles are sold. Finally, Butler has provided an
assurance that the base prices of most Cadillac vehicles will still be
quite affordable compared to some of its European rivals.