Whither Sedans? - ATS/CTS/XTS Replacement News
What a difference a decade makes. When Cadillac started on its journey to relevance in the luxury market, they charted a course that resulted in a bespoke rear-drive platform that would bring world-class offerings to go up against the most popular offerings from the German brands. This platform (Sigma) underpinned the first CTS in 2003, the original SRX shortly thereafter, as well as the second generation CTS and a new STS in 2008. CTS and STS came to market to go against BMW 3, 5, and 7 series (though positioned, size-wise, in between 3 and 5 (CTS) as well as 5 and 7 (STS).
This positioning was close, but not quite right. The strategy was adjusted in 'the aughts' (200x) to attack the competition dead-on. This resulted in the ATS, third generation CTS, and finally the CT6. However the market has moved yet again. The bulk of volume in the luxury segment is no longer dominated by sedans and coupes.
Buyers have discovered utility vehicles like BMW's X's (1, 3, 4, 5, and 6) as well as the Audi Q's (2, 3, 5, and 7) and Mercedes with their GL series (GLA, GLC, GLE, and GLS). Cadillac has very little to compete in these segments with only the XT5 mid-sized crossover. Before you think that Cadillac isn't a player in the crossover market - realize that the XT5 is by far their most popular model and is one of the most popular offerings in its segment (only Lexus' RX crossover outsold XT5 in recent months). There is no reason to believe that their announced but not yet on-sale crossovers below (XT4) and above (XT6) won't also sell as well. But, those new products won't hit the roads until 2018-2019.
To see what a lack of significant product in the crossover segments has done to Cadillac, you need look no further than the most recent month of sales. XT5 (Cadillac's lone crossover) sold 5504 units in the US market. In comparison the ATS, CTS, XTS, and CT6, combined, sold 2994 units. It isn't a viable business plan to sell 4 models, with all the development and marketing costs they entail, to sell 60% of the number of a single crossover. So, it should come as no surprise when Cadillac's Grand Poobah, Johan de Nysschen, in an interview with Reuters - admitted that Cadillac's next line of sedans would be combining ATS, CTS, and XTS into a single offering that would sell alongside the CT6.
The new sedan will be built at Cadillac's Lansing plant, which suggests the new car will be built on GM's Alpha platform that underpins the ATS and CTS. Additionally, Cadillac will offer a new small-car to compete with the Audi A3. This suggests a smaller offering than the ATS, though given that de Nysschen also stated it would be built at the Lansing plant suggests that the sub-ATS car would also be rear-drive based. That may make this car more a BMW 2-Series competitor than a true front-drive based competitor to Audi's A3 and Mercedes GLA.
It is possible both products will share the relatively new Alpha platform that currently serves as the basis for the current ATS and CTS. Why not base some of these off of the CT6? Well, CT6 just came to market and required significant investment in a new platform (Omega). This platform will easily handle flagship sedan/coupe duties - but is likely much too expensive to build lower-priced sedans from.
So, Cadillac finds itself crossover-poor and with too many sedans of which to support development and marketing. The final plan appears to merge ATS and CTS back into a single offering that would more closely match the BMW 3-Series/Audi A4/ and Mercedes E-Class. A new, smaller sedan to compete in the entry-level sedan space occupied by BMW 2-series/Audi A3/Mercedes GLA - likely with rear-drive. Then, XTS finally goes away in favor of a value-priced CT6 derivative that would help pay for all that expensive Omega-chassis development.
The remaining question will be how good a product the new ATS/CTS replacement might be. Will it directly compete with the A4/3-Series/C-Class and A6/5-Series/E-Class products or will this be a return to the 'in-between' product that Cadillac didn't have great success with before. Of course, with the importance of crossovers in today's luxury market, even a sedan that tries to play in both classes might not matter while the utility vehicle offerings bring in more than their fair share of customers and profit.
We should know much more in 2018/2019 when these new products debut.