We’ve spent an inordinate amount of time here debating Cadillac’s painful past. But what about its present, and future? GM has spent huge amounts of money in trying to reboot Cadillac in the past fourteen years, ever since the CTS came out. And in the past year or two, they’ve escalated their commitment and intensity, by hiring Johan de Nysschen from Audi and moving its headquarters to NYC, in an effort to recreate Audi’s slow but steady rise in the global premium car segment. Genuine success with the CTS and ATS have so far been somewhat muted and elusive, and their momentum seems to be slowing. de Nysschen’s strategy is to achieve higher transaction prices, but buyers seem reluctant to pay anything near full price for them.
Meanwhile, the Cadillac Escalade is on a tear ever since its 2014 redesign. Yes, everyone knows it’s just a Chevy truck with a lot of bling, but folks are literally tearing them out of dealer’s hands, at or near full price. That amounts to an average transaction price of $85 k for the lwb ESV version, or a whopping 33% more than what the CTS can garner. $100k Escalades are not unheard of. And the average age of Escalade buyers is well below the rest of the line. While the Escalade undoubtedly generates the lion’s share of Cadillac profits, de Nysschen frets about the (negative) impact the Escalade has on his long-term positioning of the brand. As Cadillac marketing chief Uwe Ellinghaus said “As much as I want to feature that it is a great-looking and -driving car, and it’s a cool Cadillac and we’re proud of having it, … we must avoid the impression that this sets the direction for Cadillac as the brand,”
Is it a real problem, or a case of these foreigners not “getting” the fact that the Escalade is perhaps the only “genuine” Cadillac in their portfolio? And maybe they need more of the same?
Ironically, the Escalade has given Cadillac and its dealers a glimpse of how life would be like if the vision as laid out by de Nysschen comes true: tight supply and inventories; low incentives, and genuine demand driven by desire rather than a good deal. But the Escalade is intrinsically so outside of Cadillac’s core mission, which is why it makes the brand’s execs uneasy.
Previous Cadillac head Bob Ferguson had proposed a whole family of Escalades, including crossovers. But that’s been nixed. Yet there’s talk of a $100k plus VSport model. The profits are too seductive. “How do you balance the desire to bring it into alignment with where we’re taking the brand and the equally intense desire not to screw up a good thing?” de Nysschen wondered aloud last April.
Although I’m no fan of the Escalade, is it really any less tasteful than a lot of the loud, brash and flashy Cadillacs of the past? Who bought an Eldorado in 1953? A newly-minted celebrity, someone who drilled a gusher, or anyone else who fell into some money rather more quickly than average. And who buys a $100k loaded Escalade today? Clearly it’s the anti-Tesla, yet of the same demographic. The “Tesla buyer” of 1953 would have bought a Jaguar XK 140. There’s always some who seem to gravitate to a big, brassy Cadillac.
Cadillac is hoping that the CT6 will make some serious inroads into the market dominated by the Merceded S-Class and BMW 7 Series. More specifically, the dealers are hoping that buyers looking to buy an Escalade for the wife will consider a CT6 for themselves. As one NJ dealer said: “I’m going to park the CT6 right next to the Escalade in the showroom, that’s for sure.” Who would have thought that a truck would become Cadillac’s halo vehicle?