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Under market pressure, Cadillac, a luxury brand, has cut prices again. According to netizens, Cadillac brand-new model CT4 terminal price reduction competition, dealers played 189700 yuan from the publicity posters. It means that the CT4 has been on the market for only four months and has become another Cadillac medium-sized sedan with a terminal price of less than 200000 yuan.

During the inventory clearance of the national five models in mid-2019, Cadillac sold new cars at a minimum discount of 40%. The terminal naked car price of the ATS-L model is generally as low as 180000 yuan, and it is also the first time that the Cadillac model sells for less than 200000 yuan. With the great adjustment of the product line and the suspension of production and withdrawal of ATS-L and other models, Cadillac sought to restore the price system and immediately launched new cars such as CT5, CT4 and XT6, forming a lineup of domestic three cars and three SUVs. Among them, the CT4 model was officially launched in April 2020, with an official guidance price of 23.97-259700 yuan, which is the lowest since Cadillac entered China.

Cadillac, which plans to achieve "one step" in terms of pricing, does not seem to escape the "price for volume" sales strategy. Soon after the launch of the CT4 model, it soon continued the brand tone of price reduction competition, with a general market discount of about 30, 000 yuan. But as an entry-level Cadillac sedan, CT4's market performance is not satisfactory. The data show that CT4 sales in July were 1100, lower than those of CT5 or CT6; in the four months since its launch, CT4 has sold a cumulative 6488 vehicles, showing no impressive results.

CT4 has launched only two equipped models, the 28T fashion model with a price of 239700 yuan and the 28T elite model with a price of 259700 yuan. The new car is positioned as an entry-level medium-sized sedan and can be seen as the successor to the standard wheelbase Cadillac ATS. The new car is young and sporty both in appearance and interior, with a 2.0T turbocharged engine as standard, a maximum horsepower 237Ps, a peak torque of 350Nm, an 8-speed manual gearbox, a 0-100km acceleration time of 6.9s and a rear wheel drive layout.

Even if a number of new cars are put on the market, Cadillac still shows sluggish growth. In 2020, Cadillac officially lost the first place of second-tier luxury sales, and the sustained and steady growth of Lexus really put pressure on Cadillac. In July 2020, Cadillac sold 20003 vehicles, while Lexus sold 22325. From January to July, Lexus achieved 7 per cent year-on-year growth, with sales of 117651 vehicles, while Cadillac sales fell 19.3 per cent year-on-year to 104360, losing the second-tier luxury top spot again.

The upgrading of the product line did not bring much surprise to the brand, with the luxury car market bucking the trend and Cadillac still fell by more than 19% in July. Therefore, the further price reduction of the dealer terminal is also a continuation of the brand strategy of "price for quantity". Take CT4 as an example, the starting price of the terminal at 189700 yuan has dropped by 50, 000 yuan compared with the official guidance price, and the price reduction has been intensified. At the same time, the CT4 also became the second Cadillac model with a terminal price of less than 200000 yuan.

The sales strategy of sharp price reduction competition is a "double-edged sword", which gives Cadillac short-term benefits, but is not conducive to long-term development. This led to a serious decline in brand premium, chaotic product market prices, low second-hand salvage value and declining brand loyalty, which eventually led to anaemic Cadillac sales growth and the loss of second-tier luxury first place.

Price reduction is the most effective measure to boost sales in the short term, but it is also a helpless move, highlighting the weak state of the brand market. Wang Yongqing, general manager of SAIC General Motors, once gave Cadillac a double-digit growth target for 2020 and got rid of the only "price war" sales strategy. The reason given by Wang Yongqing is, "as consumers begin to return to rationality, the concentration and loyalty of brands are getting higher and higher, and customers have higher and higher requirements for enterprises." in such a competitive environment, only price war is out of place. " Now it seems that the market performance of Cadillac did not develop as expected and is facing greater market pressure.

To form the trend and pattern of today's second-tier luxury market, for Cadillac brands, Cheng Ye price war, defeat is also a price war. After weak growth caused by price recovery, Cadillac plans to restart the price war, but the impact on the overall brand image is expected to be inevitable.

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