Since its launch 18 months ago, the Cadillac ATS sedan has been lauded as having the performance chops to help the brand finally compete with the German luxury juggernauts.

So why did ALG, the industry's arbiter of resale values, slam the ATS at the outset of its 2014 model year?

It wasn't because of driving dynamics or refinement, but rather bloated inventory and high incentives.

A year ago, the ATS had among the highest residual ratings in the competitive compact luxury market, better than those of the BMW 3 series. But ALG's latest ratings put it toward the bottom of the pack, citing an overly ambitious volume forecast that left Cadillac dealers with inventories routinely exceeding a 140-day supply, more than double the level that's considered healthy.

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Cadillac ATS Residuals Take Major Hit From Over Production And Big Dealer Discounts

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