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Cadillac SRX Vs. Volkswagen Touareg

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Forbes Car review

Cadillac SRX Vs. Volkswagen Touareg
10-04-2005

By Dan Lienert

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The Cadillac SRX sport utility vehicle exemplifies many issues facing Detroit. It is a typical Detroit car in that it is an SUV with declining sales, but it is also a rare American auto: a luxury car that can outsell European competition--excellent competition, at that--by some margin.

In the first eight months of 2005, Volkswagen's Touareg SUV matched only 71% of the SRX's American sales. Considering that the SRX might be the best Cadillac, and that the Touareg might be the best Volkswagen, the Caddy's superior sales performance is evidence against the myth that Detroit cannot compete against the best foreign luxury cars. Some foreign luxury brands such as Toyota Motor's (nyse: TM - news - people ) Lexus subsidiary are idolized in the auto business and called infallible, but cars such as the SRX show that the best from Detroit can take on the best in the world.

The Touareg and SRX are both outstanding vehicles, with multiple engine options, luxurious interiors, handsome exterior styling and driving dynamics that seem at times more like those of sports cars than SUVs.

Cadillac SRX Vs. Volkswagen Touareg
One reason for the SRX's superior sales performance could be patriotism among American buyers. A more likely reason is its slight advantage in terms of practicality versus the Touareg. It is 8 inches longer than the Volkswagen and can seat five or seven passengers, whereas the Touareg only seats five.

Another factor in the SRX's convincing lead in the sales column is the effect of discounts. You can currently get 2.9% to 3.9% financing on a new Touareg, but similar financing deals have been available on the SRX for months, plus rebates, plus General Motors' (nyse: GM - news - people ) employee discount program, which applied to most 2005 models, including the SRX. Under this incentive, customers paid the same price for GM cars as the company's employees, and windfall sales resulted. GM's American sales increased 41% year-over-year in June and 20% in July.

The popularity of SUVs is declining, and the SRX has seen several months of lower sales this year, with year-over-year sales down 15% in the first three quarters. But despite the swelling black eye on the SUV market in the wake of higher gas prices, even the SRX benefited from the employee program of June and July, with a year-over-year sales increase of 18% in July.

But the SRX's lead in the standings against the Touareg could narrow substantially by year's end. The Cadillac had a terrible September, with sales down 33% compared to September 2004. In a recent report, Merrill Lynch wrote, "GM's sales have completely reversed course in the last two months of GM's employee discount program, with the company giving back nearly all its market share gains of June and July." GM's year-over-year sales declined 16% in August and 24% in September, and are down 1% for the year.

Still, the SRX has been a bright spot. It is nowhere close to being GM's best-selling vehicle--or even Cadillac's--but it shows that the Americans can still build world-beaters, even in such a troubled area as the SUV market.
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Good review, now if only the silly interior were even half as nice as that of the Tourag. Then we' be in business! Edited by Croc
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