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  • William Maley
    William Maley

    Cadillac Lays More Money On the Escalade's Hood

      Trying to prevent customers from defecting to the Lincoln Navigator

    There's a war going on between Cadillac and Lincoln. With the new Navigator, Lincoln has a very compelling alternative to Cadillac's aging Escalade. But Cadillac is fighting back by dumping a bunch of cash on the hood.

    Bloomberg obtained a memo sent to Cadillac dealers that announces a new promotion where current lease customers of 2016 Escalades are being offered a $10,000 discount on a new Escalade. Owners of 2016 Escalades have to make do with a $7,500 discount. The promotion runs until the end of May. GM Spokesman Jim Cain confirmed the promotion to Bloomberg.

    This isn't the first time Cadillac has put a huge amount of money onto the hood of the Escalade. Back in November, Cadillac was offering owners of Lincoln models from 1999 to the current model year a $5,000 discount on an Escalade.

    Cadillac still holds a significant edge over the Navigator in terms of sales - 8,111 Escalades vs. 4,062 Navigators through March. But Lincoln is gaining ground with Navigators only sitting on dealer lots 10 days on average. 

    “GM is trying to keep Escalade buyers out of Navigators, for sure. You’ve got a fresh Navigator and you’ve got an Escalade that is not new and is starting to age,” said Jeff Schuster, an analyst at LMC Automotive.

    “This is a particular battle that GM doesn’t want to lose ground in. It speaks to the importance of the Escalade.”

    Source: Bloomberg



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    $7500 to $10000 on the hood because your greatest competitor puts up a NEW vehicle that directly competes with yours?  That sounds very pre-BK GM.  Only NEW (and better product) can arrest and correct that issue.

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    33 minutes ago, riviera74 said:

    $7500 to $10000 on the hood because your greatest competitor puts up a NEW vehicle that directly competes with yours?  That sounds very pre-BK GM.  Only NEW (and better product) can arrest and correct that issue.

    Yeah it sounds like something they should have held off for 6 months to see if the Navigator really steals any sales anyway. People still love the Escalade... Even if it is currently the worse of the two complete packages it's still a great overall vehicle. 

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    2 hours ago, riviera74 said:

    $7500 to $10000 on the hood because your greatest competitor puts up a NEW vehicle that directly competes with yours?  That sounds very pre-BK GM.  Only NEW (and better product) can arrest and correct that issue.

    Agreed.  And when the new GLS and new X7 hit the market in the fall or winter they’ll have $10k off Escalades for all.

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    2 hours ago, balthazar said:

    $10K is nothing when the Escalade line is bringing in $1B in profit all by itself.

    Escalade over the past 4 years has averaged high 30,000s in sales, even with a few export sales, let's call it 40,000 units.  They would have to make $25,000 profit per unit to hit $1 billion.  I know it is made of Silverado parts, but that still seems like a big margin on an $85,000 vehicle.    Pre $10,000 discount, maybe.   

    But if the Escalade is responsible for $1 billion in profits, why did GM post a $330M profit for 2017 when factoring out the European sale/loss.  GM posted a $3.88B loss in 2017.   Even on 2015-2016 numbers where GM had a $9B profit, I find it hard to believe that the Escalade is 11% of their profit when it is less than 1% of their global sales volume.

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    You always get it backwards.

    Silverado has Escalade parts. 😁

    And there's a lot more profit to be had when you look at the average and high-end MSRP Escalades, Cadillac sells some quantity stickering for over $100 grand.

    - - - -
    GM's 2017 EBIT profit was $12.8B, which matched 2016.
    Per-share dividend was $6.62. UAW employees got up to $11K profit-sharing checks. Stock rose 6% on the announcement.

    The Company is in very fine health. It's accounting mumbo-jumbo and a one-time $7.3B write down that resulted in a bottom line of a mere $300M profit.

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    16 hours ago, riviera74 said:

    $7500 to $10000 on the hood because your greatest competitor puts up a NEW vehicle that directly competes with yours?  That sounds very pre-BK GM.  Only NEW (and better product) can arrest and correct that issue.

     

    It's called panic. Would love to see these two battle it out again.....but a few cool packages might be a better choice at this point though....

    Image will be an issue here...

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    17 hours ago, balthazar said:

    $10K is nothing when the Escalade line is bringing in $1B in profit all by itself.

    It's a huge percentage regardless of how much revenue the car brings in. 

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    The Escalade is a cash cow no doubt, I just don’t see it being 11% of GM’s total profit, though I would guess it has the highest per vehicle margin of any GM product.

    I don’t know they never went above the Ecalade, why did they stop?  Cadillac could easily have an SUV In the $125-175,000 range.  Go above the Navigator and make it 2nd rate.

    Edited by smk4565

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    As was stated, they go into the low $100Ks already.
    Just as the V8TT was predicted and now has been confirmed; even higher up Escalades are in the pipeline.
     

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    5 hours ago, balthazar said:

    As was stated, they go into the low $100Ks already.
    Just as the V8TT was predicted and now has been confirmed; even higher up Escalades are in the pipeline.
     

    I don't mean a higher trim Escalade, I mean a vehicle above Escalade.  Something like a Lamborghini Urus competitor with more luxury than an Escalade and more performance than a CT6 V-sport.  And maybe Escala will become a $150,000 base price SUV, I dunno, but I think if Cadillac wants to march upward, then SUV is where you do it.

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    Lambo is projecting worldwide 2018 sales of the Urus to be 1000 units. Is that worthy of building a competitor to? Other than the Cayenne GTS, I don't see any other sporting hi-po SUVs out there at this level.

    The next generation Escalade can easily be positioned 25% higher right off the bat... then Cadillac should add performance & packages well above that. 4.2TT has the EXACT same torque output as the Urus, piece of cake to slide one into an Escalade V-Sport.

    And Cadillac IS marching upward.

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    They'll top 1,000 Urus's easy, I think Lambo will double their worldwide volume of 3,500 units, Urus will easily be their top selling model.  Ferrari is going to make an SUV too, Bentley has one.

    The Escalade needs a $10k price cut to compete with Navigator, but they are going to magically raise the price $20,000 for the new one?    That  is in effect $30k more than the current sale price.  I don't see it happening, they tried to push the CTS up 20% in price and sales collapsed.

     I think a model better than Escalade is needed, leave the Escalade where it is.  But if they want to make a base Escalade $125,000 with a $200,000 V-sport to go against the G-wagen bring it on.  And good for Cadillac if they do it, if you can take a Tahoe and charge and extra $70k then take the money and run.

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    • It would be really sad if the urus becomes the top selling Lambo.

    • Navigator is competing with the Escalade, not the other way around. Escalade almost buried the Navigator- Cadillac is not going to lower the price on it, you're dreaming. But yes, I could see... OK not 25% ($18K) but a $10K raise for the next generation, then expand the range upward. And basically that price raise is accomplished by just increasing standard features. Don't need another SUV above it, the next gen Escalade will be the "better Escalade". Isn't it due in like 18 months?

    • Of course CTS sales decreased- it moved upmarket. S<E<C, 7<5<3. If BMW increased the price of the 3 to the 5, it's volume would lower also.

    • Remember: the Tahoe uses Escalade parts.

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    10 hours ago, balthazar said:

    • It would be really sad if the urus becomes the top selling Lambo.

     

    • Of course CTS sales decreased- it moved upmarket. S<E<C, 7<5<3. If BMW increased the price of the 3 to the 5, it's volume would lower also.

    • Remember: the Tahoe uses Escalade parts.

    I bet it will be.. 

    Actually, you have the '<' (less than) backwards above---  should read C<E<S, and 3<5<7.  

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    12 hours ago, balthazar said:

    • Remember: the Tahoe uses Escalade parts.

    Wouldn't they both be built with Silverado parts as it's the newest vehicle? 

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    12 hours ago, balthazar said:

    • It would be really sad if the urus becomes the top selling Lambo.

    • Of course CTS sales decreased- it moved upmarket. S<E<C, 7<5<3. If BMW increased the price of the 3 to the 5, it's volume would lower also.

    Dealers are already selling out of their Urus allotments and the thing doesn’t even arrive for 6 months.  It will be their best seller for sure.

    The CTS thing is exactly my point, the CTS should have stayed a 3-Series fighter and they should have had a new product above it.  Same with Escalade, it should stay at its current price and a new SUV should go above it.  

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    17 minutes ago, smk4565 said:

    Dealers are already selling out of their Urus allotments and the thing doesn’t even arrive for 6 months.  It will be their best seller for sure.

    The CTS thing is exactly my point, the CTS should have stayed a 3-Series fighter and they should have had a new product above it.  Same with Escalade, it should stay at its current price and a new SUV should go above it.  

    BMW has not stayed there, 2 series is the old 3 series as they pushed every model up. Hell the current 3/4 series is what the old 5 series used to be. Even MB has pushed the size and features up on their models so that lower models are now what the upper older versions used to be.

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    2 hours ago, dfelt said:

    BMW has not stayed there, 2 series is the old 3 series as they pushed every model up. Hell the current 3/4 series is what the old 5 series used to be. Even MB has pushed the size and features up on their models so that lower models are now what the upper older versions used to be.

    There is size creep in all segments, but the CTS is larger than a 5-series.  The CTS-V is 197.6 inches long that is bigger than the STS.  The 3-series sedan is 184.5 inches long, it also doesn't have a sales problem like the CTS has.

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    1 hour ago, smk4565 said:

    There is size creep in all segments, but the CTS is larger than a 5-series.  The CTS-V is 197.6 inches long that is bigger than the STS.  The 3-series sedan is 184.5 inches long, it also doesn't have a sales problem like the CTS has.

    The ATS is sized to compete w/ the 3-series. 

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    9 minutes ago, Cubical-aka-Moltar said:

    The ATS is sized to compete w/ the 3-series. 

    The ATS is priced to compete with the 1/2 series and CLA. More space in a Cadillac is not a disadvantage.

    The new Navigator has a much better interior than the current Escalade.  The Escalade is more nimble, but in this segment, that is a very relative statement anyway.   That said, I'm told the new Escalade will have an Escala looking interior.  Much less brash than the Navigator, but no less luxurious. 

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    No need for Cadillac to worry, when the Maybach SUV goes on sale next year Lincoln will be giving $10,000 off on all Navigators with 0% financing.

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    42 minutes ago, Drew Dowdell said:

    The ATS is priced to compete with the 1/2 series and CLA. More space in a Cadillac is not a disadvantage.

    The new Navigator has a much better interior than the current Escalade.  The Escalade is more nimble, but in this segment, that is a very relative statement anyway.   That said, I'm told the new Escalade will have an Escala looking interior.  Much less brash than the Navigator, but no less luxurious. 

    Too true that it is all relative, my wife loves our Escalade, showed her the new Navigator and she did not like the design of the seats as well as many other things. Might be a wife issue, but she does love the Escala. 

    I am thinking that Lincoln might have gone too far with the split lower leg supports and the individual sections on the seat. Sometimes one could go too far with trying to have bleeding edge luxury it would seem.

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    • I have 2 of my muscle cars already. I would certainly entertain a '50s Eldorado Seville and one of the late '50s MoPar supercars, preferably an Adventurer but a 300 Letter Series would be just peachy too.
    • [Wanders off over the moonscape...]
    • Dozens of unique vehicles sell less than 30K per year. Volume is immaterial, profit is the prime consideration. But even then: Luckily, Cadillac, and in turn; General Motors, produces dozen & dozens & dozens of other models. Tesla only builds like 11K Model S per year. Course; they don't make a profit... but they're still building the thing. We've read some wags claim that 'Chevy doesn't make any money; too many low margin models' and 'Buick sales are slowing every year; it can't be making a profit' and 'Cadillac doesn't sell 2 million units/year; therefore they can't be making a profit'. Solid, disconnected thinking there, that. Gee, I don't think GMC is making $11 billion in profit all by itself.
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